The general sentiment of investors has drastically changed following the recent drop in cryptocurrency market value. Bitcoin has lost almost 20% since its peak. Fear & Greed Index is now in a state called “Fear” after nearly two months.
Fear is Back
The Bitcoin Fear & Greed Index, a popular metric, tracks several factors in the digital asset community to show momentary sentiment toward the most prominent cryptocurrency. These segments include volatility, volume, social media comments and surveys. The Index gives results that range from 0 (“Extreme Fear”) up to 100 (“Extreme Greed”) The current metric is 34 – “Fear”.
Bitcoin Fear and Greed Index. Source: Alternative.me
It’s worth noting, however, that the Index was last in this state on October 1. The price of bitcoin was $42,000 back then. The cryptocurrency experienced significant improvements throughout October. Perhaps the most notable was the launch of ProShares Bitcoin Strategy ETF, which is the first ETF that is futures-backed in the United States. The digital asset’s USD price soared to an all-time high of almost $65,000 shortly after.
The Federal Reserve and the SEC provided reassurance that the US would not ban cryptocurrency, which helped bitcoin surge over the past two months.
Russia’s government announced that it is not planning to crack down on cryptocurrency (as China did). Putin also mentioned that bitcoin and other coins could be used as a payment method in the future.
BTC’s first ten November days were also very successful. It reached a record $69,000 and its market capitalization hit $1.3 trillion last week.
However, bitcoin experienced a sharp correction over the last week. It is currently trading at $57,000 as of this writing. Investors’ emotions have changed to “Fear” somewhat unexpectedly.
Is it time to ‘Buy the Dip’?
Although the term “Fear” may seem like a sign that someone isn’t interested in the digital asset market, this is not always true. Experts in the field believe that cryptocurrency in this state, or even “Extreme Fear”, is a good option for buying.
They seem to agree with the third largest bitcoin whale, purchasing 1,647 BTC for less than $60K two days ago. The sum total was close to $100 million.
Marla Brooks – Financial Analysis
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