Data shows the Bitcoin fear and greed index has continued to display low values for the third straight week as the market remains fearful.
Bitcoin Fear And Greed Index Currently Points At “Fear”
According to the latest weekly report from Arcane Research, the BTC market has now remained fearful for the 3rd consecutive week.
The “fear and greed index” is an indicator that tells us what the general sentiment among investors in the Bitcoin market currently is.
The metric uses a numeric scale that runs from one to hundred for representing this sentiment. All values above fifty signify that the market is greedy right now
On the other hand, indicator values below the cutoff show that the market sentiment is that of fear at the moment.
End values of above 75 and below 25 represent investor sentiments of extreme greed and extreme fear, respectively.
Historically, tops have tended to form during periods of extreme greed, while bottoms have formed during extreme fear.
Because of this, some investors believe that it’s best to buy during the former, while the latter periods are best for selling.
Related Reading | Glassnode Data Shows A Bullish Bitcoin Crossover Has Recently Occurred
Contrarian investing is a trading technique that uses this idea. This famous quote from Warren Buffet encapsulates the philosophy: “Be fearful when others are greedy, and greedy when others are fearful.”
Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year:
The BTC market seems to be fearful at the moment | Source: Arcane Research's The Weekly Update - Week 16, 2022
As you can see in the above graph, the Bitcoin fear and greed index is currently showing a value of 27, corresponding to a sentiment of fear.
This value is right on the edge of extreme fear, and the market has stayed around this value for the past few weeks. During that period, the indicator’s value has also had some dips to extreme fear.
Related Reading | Bitcoin Bearish Signal: 600-Day MA Starts To Break Down
The reason behind this trend may be the fact that BTC has been stuck in consolidation for a while now, showing no real movement.
The report suggests that investors seem to be anxiously waiting for Bitcoin to make a move before they take any action.
At the time of writing, Bitcoin’s price floats around $39k, down 7% in the last week. Over the past month, the crypto has lost 12% in value.
The below chart shows the trend in the price of the coin over the last five days.
Looks like the price of the crypto has plunged down over the past day | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research