The bitcoin and cryptocurrency market crash has completely eroded positive sentiment as bears have gained control of the entire market. Over the past month, the Fear & Greed Index has been on a steady decline, falling to new yearly lows in the process. With the price of bitcoin dropping to the $53,000 level last week, it has now sent the crypto Fear & Greed Index to levels not seen since the collapse of cryptocurrency exchange FTX in November 2022.
Cryptocurrency fear and greed index drops to 28 points
Cryptocurrency Fear and Greed Index crypto/fear-and-greed-index/” rel=”nofollow noopener” target=”_blank”>keep going roll into Fear territory with a score of 28 out of 100 after enjoying a few months of Greed in 2024. This decline shows the unwillingness of investors to put money into the market as expectations are that prices will continue to fall.
To put into perspective how bad the current market sentiment is, the last time the crypto Fear & Greed Index dipped as low as 28 was in November 2022. This was after the infamous FTX crash, which sent the price of bitcoin down to $16,000.
Since then, the index has managed to stay above the 30-point score, fighting off the tendency to fall into Extreme Fear at every turn. However, it seems that the market has completely succumbed to the bearish pressure, something that could finally push it into Extreme Fear territory for the first time in two years.
bitcoin recovery could be imminent
While the crypto Fear & Greed Index plummeted to a score of 28 and remained firmly in fear territory, driving investors away, it could be a positive if we stick to historical performance. One thing that has been consistent is that the index that drops to extreme fear has generally marked the bottom of a decline.
For example, in November 2022, when the bitcoin price crashed towards $16,000 and pushed the crypto Fear & Greed Index below 28, it marked the bottom of the market. There was a sideways movement for a while. However, in the following months, the market started to recover and another bullish streak began.
Since the November 2022 low, the price has rallied by over 250% to reach a new all-time high in 2024. Now, if this trend continues, the bitcoin price could be in for another rally once the accumulation is over, which could trigger another run to a new all-time high.
At the time of writing, the bitcoin price is already seeing some recovery from the lows to trade at $57,200. While this is still a drop of 8.8% over the past seven days, it is still a welcome recovery from the weekend lows below $54,000.
Featured image created with Dall.E, chart from Tradingview.com
