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Bitcoin price action is only 20% away from all-time highs, but market sentiment has returned to “extreme fear” levels for the first time since $43,000.
At the time of writing, BTC price has stabilized at around $55,000 after dropping $6,000 in just one day (from $59,000 to $53,000). Bitcoin’s plunge causes the cryptocurrency’s Fear & Greed index to plummet.
According to data from Alternative, the cryptocurrency Fear & Greed index as of November 27 is currently showing its lowest level since late September.
At the time of writing, this index has reached 21, which means “extreme fear”.
According to Alternative, the market sentiment turning to “Extreme Fear” is a sign that investors are getting too nervous, which could mean a good buying opportunity with a nice position.
“If you have money, then seize this opportunity right away, many coins are having a very good price,” said investor Alistair Milne.
Fear & Greed Index aims to measure and record investors’ psychological state of fear and greed, the index is updated daily, weekly, monthly and annually.
This index will measure the whole market whether it is well-valued or not. The indicator is based on the analysis that over-expressed fear will lead to a decline in asset prices, while excessive greed will lead to the opposite effect.
The Fear & Greed Index will be measured on a scale of 1 to 100.
According to CNNMoney’s definition:
“A score of 0 to 49 is “Fear” indicating underpricing and oversupply in the market. Between 50 and 100 is “Greed” indicating an overvaluation of the cryptocurrency. If the scale reaches 100, bubbles may occur.
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