Bitcoin Fear and Greed Index Slides to Extreme Fear
Signaling extreme fear in the cryptocurrency markets the Bitcoin Fear and Greed Index, today slid to a low of 12 which shows extreme pessimism on its price. This comes at a time when Bitcoin is trading in the range of $28000 to $29500.
Fear and Greed Index at 12/100
The Fear and Greed Index is a counter which estimates the emotions of all the investors and traders in the cryptocurrency markets. Similar to a stock fear and greed index:
- a number close to zero suggests extreme fear
- a number close to 100 suggests extreme greed
Since both fear and greed are extreme emotions, they are only witnessed in the case of extreme markets. Extreme fear is seen at the bottom of bear markets while extreme greed is seen near the top of bullish markets. A low score indicates a higher number of people who want to sell the assets (here cryptocurrencies). Similarly, a high score indicates a higher number of people who want to buy the assets.
Can scores remain Low or High for long
During sustained bear markets scores can remain low for an extended period of time. Similarly, in the case of bull markets, scores can remain high for an extended period of time. A high score such as between 85-100 is rarely sustainable and the same is true for scores between 0-15. However, for markets to bounce back(bear markets) or fall down(bull markets), there has to be a change of at least 10%, a generally agreed number for traceback(exit of bull or bear markets).
Disclaimer
The information provided is for purely educational purposes. Traders and Investors are requested to consult their financial advisors before making any financial decision.