The Bitcoin Fear and Greed Index is a measure of the sentiments of the crypto community towards the primary cryptocurrency. It has entered “extreme fear” territory since July 31. This is because the price of the digital asset dropped by $8,000 within a matter of days.
Extreme Fear among BTC Investors
Recent developments in the financial market, particularly the Evergrande debt crisis, have caused a significant setback for digital asset industry. The result was that bitcoin’s value plunged to below $40,000, the lowest price since April. Similar developments caused a significant shift in sentiment within the community about the asset.
These expectations are confirmed by the Bitcoin Fear and Greed Index. This popular indicator that measures the sentiment towards BTC has fallen to an “extreme fear” level. It was last seen on July 21st, when bitcoin fell below $30,000.
The index’s results range from 0 to extreme fear and 100 to extreme greed. Today’s number is 21. The price of cryptocurrency is what causes most swings in the metric. Other factors, such as volatility, market volume and social media trends, dominance, and surveys all play an important role.
The Fear and Greed Index is a measure of the behavior of crypto-communities towards bitcoin and other digital assets. Ethereum’s situation is similar to that of other digital assets. It has entered a “fear territory” (27), which coincides with ETH’s plunge below $3,000.
What does ‘Extreme Fear’ actually mean?
Although “extreme fear” may sound alarming to many people who deal with digital assets, this is not always true. Experts in the field think that bitcoin’s current state is a great place to buy. Warren Buffett, the Oracle of Omaha, once advised investors to be greedy when the crowd fears them and vice versa.
One of the biggest bitcoin whales seems to believe in this theory, as he used the current dip to acquire a larger portion of the cryptocurrency.
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