The Bitcoin Fear and Greed Index continues to point to an extremely fearful market. According to the latest weekly report from Arcane Research, the crypto market is currently experiencing its longest period of extreme fear since the COVID crash of 2020.
The index “Crypto Fear & Greed Index” is an indicator that tells us about general investor sentiment about Bitcoin and the broader crypto market.
The metric uses a numerical scale that ranges from one to one hundred to display this sentiment. When the value of the index is below fifty, it means that investors are fearful at this time.
On the other hand, indicator values above the threshold imply that investors currently share a sentiment of greed.
Values at the extreme end of the range (below 25 and above 75) indicate feelings of extreme fear and extreme greed, respectively.
Now here’s a chart that shows the trend of bitcoin’s fear and greed index over the past year:
As you can see in the chart above, bitcoin’s fear and greed index is currently showing a value of 15, suggesting that the general feeling is one of extreme fear.
These low values of the metric have now been present for over a month. Such a long streak last happened after the COVID crash two years ago. The trend then lasted 48 straight days before sentiment improved.
Historically, lows have tended to form during times of extreme fear, while highs have occurred during times of extreme greed.
For this reason, some investors believe that the early periods are ideal buying opportunities for bitcoin, while the latter could be suitable selling points.
The trading technique that follows this idea is called contrarian investing. Warren Buffet’s famous quote sums it up perfectly:
Be fearful when others are greedy, and greedy when others are fearful.
Going by this philosophy, the current sentiment could mean that now is the time to buy bitcoins.
For the moment, it is not known how long this wave of extreme fear will last. It could be as long or even longer than the previous one, or the feeling could soon improve.