The Crypto Fear and Greed Index shows that while investors are still cautious, market sentiment is nevertheless recovering sustainably.
Crypto Fear and Greed Index Rises, But Remains in “Fear” Territory
According to the latest weekly report from Arcane ResearchMarket sentiment hit the best sentiment since April of this year on Saturday.
There “fear and greed indexis an indicator that measures general investor sentiment in the crypto market.
The metric uses a numerical scale ranging from zero to one hundred to represent this sentiment. All values above 50 signify a greedy market, while those below the mark suggest fearful investors.
Values near the end of the range greater than 75 or less than 25 indicate “extreme greedand feelings of “extreme fear”, respectively.
Historically, lows have tended to form during periods of extreme fear, while highs have occurred during other extreme sentiment.
For this reason, some investors believe that earlier periods offer ideal buying opportunities, while later ones may be suitable selling points.
Now, here is a graph that shows the trend of the Crypto Fear and Greed Index over the past year:
Looks like the value of the metric has been steadily climbing up in recent days | Source: Arcane Research's The Weekly Update - Week 30, 2022
As you can see in the chart above, a while back the Crypto Fear & Greed Index had been inside extreme fear territory for a few months, making it the most long streak of mentality at rock bottom.
But, over the past few weeks, the indicator has seen some growth as the various coins in the market simultaneously saw a rally.
At the time the report came out (this was yesterday), the fear and greed index had a value of “31”. This implies a fearful market.
Today, the sentiment has improved slightly as the indicator’s value is now at “34”, which however remains firmly inside fear territory.
The value of the indicator is 34 at the moment | Source: Alternative
On Saturday, the metric nearly broke out of fear territory as it reached a value of “42”. This is the highest reading the indicator has seen since April. But before a surge of greed could occur, the fear and greed index crashed.
The latest trend suggests that while market sentiment has improved, investors have remained cautious. This could pave the way for a slower but more sustained market recovery.
At the time of writing, The price of bitcoin is floating around $23,300, up 9% in the past week.
The value of the crypto seems to been trending sideways during the last few days | Source: BTCUSD on TradingView
Featured image from Quantitatives on Unsplash.com, charts from TradingView.com, Arcane Research