The crash in the Bitcoin and cryptocurrency markets has completely destroyed the positive sentiment as bears have taken control of the entire market. Over the past month, the Fear and Greed Index has been steadily falling, reaching fresh yearly lows. The drop in the price of Bitcoin to $53,000 last week has brought the Cryptocurrency Fear and Greed Index to levels not seen since the collapse of the FTX cryptocurrency exchange in November 2022.
Crypto Fear and Greed Index Falls to 28
Cryptocurrency Fear and Greed Index lasts rolling into Fear territory with a score of 28 out of 100 after several months of Greed in 2024. This decline shows investors’ reluctance to put money into the market as prices are expected to continue to fall.
To give you an idea of how bad the current market sentiment is, the last time the Crypto Fear & Greed Index fell to 28 was in November 2022. This happened after the infamous FTX crash that saw the price of Bitcoin drop to $16,000.
Since then, the index has managed to stay above 30, fending off the trend of slipping into Extreme Fear at every turn. However, the market appears to have completely succumbed to bearish pressure, which could finally push it into Extreme Fear territory for the first time in two years.
Bitcoin recovery may be inevitable
While the Crypto Fear & Greed Index falling to a score of 28 and settling firmly into Fear territory scared off investors, given its historical performance, that could be a good thing. One thing that has been consistent is that the index falling to Extreme Fear has usually marked the bottom of a decline.
For example, in November 2022, when the price of Bitcoin fell 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 some time. However, in the following months, the market began to recover and another bull run began.
From the November 2022 low, the price has increased by over 250%, reaching a fresh all-time high in 2024. If this trend continues, the price of Bitcoin could see another rebound after the accumulation is complete, which could trigger another run to a fresh all-time high.
At the time of writing, Bitcoin has already seen some rebound from its lows and is trading at $57,200. While that is still down 8.8% over the past seven days, it is still a welcome rebound from weekend lows below $54,000.
Featured image created with Dall.E, chart from Tradingview.com
