For two weeks now, the crypto market has been doing a lot less well than before. Bitcoin (BTC) has finally hit the brakes after rising for more than six weeks. And that has of course influenced investor sentiment. The well-known Fear & Greed Index is even at its lowest level since mid-October.
Crypto sentiment is deteriorating
This is good news, as prices often don’t move with the crowd. Many investors fear that a Bitcoin price of $108,000 – the record reached on December 17 – has been the highest point of this bull market. All the optimism that entered the market after Donald Trump’s victory in the US presidential elections has now largely been wiped out. That is the reset that the market often needs to resume its trend.
The Fear & Greed Index, a commonly used indicator to measure sentiment in the crypto market, has taken a dive, just like the Bitcoin price, in the past two weeks.
The meter runs from 0 to 100, with zero indicating extreme fear and one hundred meaning investors have extreme greed.
On December 17, the index still stood at a value of 87. This falls well into the zone of extreme greed. It indicates an overheated market and is often a signal of an impending correction.
We have received this correction. The Bitcoin price has fallen by 15% from $108,200 to a low of $92,000. Currently trading just above around $93,000, the Fear & Greed Index is now at its lowest point since October 15. That was no less than two and a half months ago.
The indicator currently shows a score of 65, which means that investors are still largely driven by greed. So sentiment is still positive, although it has deteriorated considerably in recent weeks.
Corrections are part of the Bitcoin bull market
Despite the correction, Bitcoin is still almost 40% higher than at the beginning of November, on the day of the US presidential election. It all seems a lot worse than it actually is. Bitcoin is still a stone’s throw away from the magical $100,000. Few investors had expected that a few months ago.
Nothing goes up in a straight line, not even Bitcoin. Corrections are part of life and ensure a sustainable bull market. Price falls actually offer investors the opportunity to get in cheaper, but then you have to dare to move against the crowd.
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Source: https://newsbit.nl/bitcoin-daalt-verder-crypto-sentiment-zakt-tot-laagste-punt-sinds-oktober/
