The cryptocurrency Fear and Greed index currently shows a state of “extreme fear” among investors. This is coming in the midst of the COVID-19 pandemic which has affected the financial market generally. The cryptocurrency market has also experienced similar effects which have crashed the price of Bitcoin and other cryptocurrencies.
At the moment, the Fear and Greed index is at 12, representing “extreme fear” and this is the first time in the last 12 months when the sentiment has been in “fear” or “extreme fear” for 3 consecutive weeks.
The crypto Fear and Greed Index is a measure of two major sentiments that govern the market. On a scale of 1 to 100, the index indicates more fear as the number reduces towards 1 and greed when it rises towards 100.
An opportunity for investors?
Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family had once said: “Buy when there’s blood in the streets, even if the blood is your own.” This means that the worse the state of the market, the better the opportunity to invest and profit out of it.
However, the current uncertainty in crypto markets might shake “weak hands” to panic sell their cryptocurrency holdings. Therefore, smart investors, on the other hand, may take advantage of the situation as an opportunity to buy digital assets.
Over the last 2 years, the number of active Bitcoin addresses on the Bitcoin blockchain is slowly increasing. This may suggest that investors are already gearing up to consider investing in Bitcoin.
Current sentiment could trigger recovery
With the “extreme fear” sentiment and the fast-approaching Bitcoin halving event, which has historically caused a major surge in Bitcoin’s price (39 days left as of writing), the massive buying of cryptocurrencies might be in place.
Overall, the crypto market is looking quite promising in the near future and it could be gathering momentum for a possible big lift soon.