About 45 days ago, the Crypto Fear and Greed Index (CFGI) hit the “extreme fear” level with a score of 22. That day, on April 15, the 24-hour bitcoin price range was between USD 39,823.77 or approximately IDR 580 million to USD 40,709 ,11 (Rp 592 million) per unit.
The market has since fallen even lower and on May 12, Bitcoin’s value hit a low of USD 25,401, which is lower than last summer’s previous low of July 2021.
If someone bought BTC on May 12th, today they would have made a profit of over 24 percent against the US dollar.
Crypto Fear and Greed Index Shows ‘Extreme Fear’ and Shaky Sentiment Holds
Despite the gains over the past two weeks, CFGI is still in the “extreme fear” zone and ranks even lower than it was on April 15.
Crypto market sentiment, at least according to CFGI, has been in “extreme fear” territory for more than a month. As of May 30, 2022, the index got a ranking score of 10, which means the latest CFGI score of 13 is an improvement.
At the time of writing, CFGI’s rating score is 13 out of 100, but that doesn’t mean the market will remain dismal. The CFGI posted on alternative.me measures market sentiment and the website notes there are two simple assumptions.
“Extreme fear could be a sign that investors are overly concerned. It could be a buying opportunity. When Investors become too greedy, it means the market will experience a correction,” notes alternative.me, quoted from Bitcoin.com, Thursday (2/6/2022).
However, extreme fear can also lead to more capitulation and the so-called buying opportunities may be much lower. Or one can also assume the current time frame is a tiered buying opportunity and people are happy to buy BTC when it is down.
CFGI’s simple assumption is just that, as it can be accepted as true, but it probably won’t come to fruition.
In the same way, if “investors get too greedy,” as CFGI puts it, that doesn’t mean the crypto market will be right. This means that if someone followed such advice, they could sell BTC at a lower point than they could by waiting.
Then again, there’s always the old-fashioned investment advice that says there’s nothing wrong with taking profits along the way. Google Trends metrics for the query “bitcoin” show interest has increased from Terra’s recent fiasco.
Interestingly, worldwide Google Trends (GT) data showed interest in bitcoin meandered for a while before the fall of Terra LUNA and UST.
However during a given week (8-14 May), GT data shows the search term “bitcoin” skyrocketing to its highest GT score (100) since the second week of June 2021. However, a week after the Terra LUNA and UST market massacres, GT data scores for the term “ bitcoin” is down 45 percent.
Previously, Bitcoin had surged above USD 32,000 or around Rp. 464.97 million on Tuesday, May 31, 2022, the highest level since May 10. Bitcoin is trading at around USD 32,071 or around IDR 466.03 million (assuming an exchange rate of IDR 14,531 per US dollar), up 4.5 percent over the last 24 hours.
However, bitcoin has fallen more than 50 percent from an all-time high hit last November, amid a broad risk asset sell-off.
Even though the price is now lower, Glassnode assesses the bitcoin market has not attracted many new investors to buy or ‘buy the dip’. Launching Yahoo Finance, Wednesday (1/6/2022), the number of bitcoin wallet addresses with non-zero balances has not changed over the past few weeks.
Glassnode said that was because investors remained concerned about macroeconomic uncertainty. This is consistent with a sell-off in the summer of 2021, with bitcoin wallet growth stagnating for about four months. Meanwhile, the number of active addresses and entities holding bitcoins has stagnated over the past few months.
“Recent sales, and lower prices have not inspired a new entry into the space, and only the HODLer remains,” wrote Glassnode analysts.
HODLers is a term that refers to investors who buy and hold. According to analysts, HODLers or entities on the network add significantly to their holdings in such situations.