The crash in the Bitcoin and crypto market has completely undermined the positive sentiment as the bears have now taken control of the entire market. Over the past month, the Fear & Greed Index has been steadily declining, in the process dropping to new yearly lows. With the Bitcoin price dropping to the $53,000 level last week, it has sent the Crypto Fear & Greed Index to levels not seen since the FTX Crypto Exchange Crashes back in November 2022.
Crypto Fear & Greed Index Crashes to 28
The Crypto Fear & Greed Index continues to roll into the Fear territory with a score of 28 out of 100 after a few months of Greed in 2024. This drop shows the reluctance among investors to put money into the market as prices are expected to continue falling.
To put into perspective how bad the current market sentiment is, the last time the Crypto Fear & Greed Index was as low as 28 in November 2022. This was after the infamous FTX crashcausing the Bitcoin price to drop to $16,000.
Since then, the Index has managed to stay above a score of 30, resisting the tendency to fall into Extreme Fear at every turn. However, it appears 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 plummeting to a score of 28 and sitting firmly in Fear territory has driven investors away, it could be a good thing based on historical performance. One thing that has been consistent is that the index dropping to Extreme Fear usually marks the bottom of a decline.
For example, when the Bitcoin price dropped to $16,000 in November 2022 and the Crypto Fear & Greed Index below 28, it marked the bottom of the market. There was some sideways movement for a while. However, in the following months, the market started to recover and a new bull run began.
From the bottom in November 2022, the price rose by more than 250% to reach a new high in 2024. If this trend were to continue, then the Bitcoin price could expect a fresh rally once the accumulation is complete, which could trigger a fresh run to a new record high.
At the moment of writing, the Bitcoin price is already seeing some recovery from the lows and is trading at $57,200. While this is still down 8.8% over the past seven days, it is still a welcome recovery from the weekend lows below $54,000.
Main image created with Dall.E, chart from Tradingview.com