Skip to main content

Extreme Fear Remains: Recapping What’s Behind The Crypto Market Panic

The current streak of extreme fear is already the longest ever in crypto history, and it’s continuing on still. Here’s a recap of the major events responsible for this bottom sentiment.

Crypto Fear And Greed Index Continues To Point At “Extreme Fear”

The “fear and greed index” is an indicator that tells us about the general market sentiment among crypto investors.

The metric uses a numeric scale that runs from zero to hundred for representing this sentiment. All values below the fifty mark imply a fearful market, while those above the threshold mean investors are greedy right now.

End values of above 75 and below 25 indicate extreme sentiments of “extreme greed” and “extreme fear,” respectively.

Now, here is a chart from the latest weekly report from Arcane Research, that shows the trend in the crypto fear and greed index over the past year:

Looks like the value of the indicator has been very low in recent weeks | Source: Arcane Research's The Weekly Update - Week 25, 2022

As you can see in the above graph, the current value of the crypto fear and greed index is 10, which suggests the market is extremely fearful at the moment.

This run of extreme fear has been going on since more than two months now, and it’s the longest ever such streak in the history of the metric.

Related Reading | What Is Bitcoin CFD and How Can It Make You a Profit

Even before this latest run of extreme fear, the market sentiment wasn’t particularly well during the rest of 2022. However, it wasn’t still quite as rock bottom as the current streak.

So, what’s behind this historically low sentiment? There are a number of market conditions that have lead to it and that are continuing to keep it so.

The first event of note is the UST collapse in May. A large stablecoin like Tether USD losing its peg put fear and uncertainty into many investors in the market.

Another is the looming macro uncertainties over the market like the possibility of FED hiking rates and the various governments around the world tightening regulations.

Related Reading | Bitcoin “Reserve Risk” Metric Approaches All-Time Lows

These above factors snowballed into a bottom sentiment and lead to larger consequences over the entire crypto market in the form of the crash.

A byproduct of the latest crash was the collapse of Three Arrows Capital (3AC), a cryptocurrency hedge fund. Another was the lender company Celsius halting withdrawals and potentially heading towards bankruptcy.

Such negative news is keeping the fear and greed index from recovering from these historic lows. Like a vicious cycle, bad news is leading to more bad news and further fueling the extreme fear sentiment.

BTC Price

At the time of writing, Bitcoin’s price floats around $20k, down 1% in the past week.

BTC plunges down | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Arcane Research

from NewsBTC https://ift.tt/lfhQuzL
via IFTTT
Labels:

Comments

Post a Comment

Any questions, Please.

Popular posts from this blog

ENS DAO delegates offer perspective on DAO governance and decentralized identity

AlphaWallet CEO and Spruce co-founder talk about their roles as contributors to the Ethereum Name Service following the project's recent airdrop. Earlier this month, the Ethereum Name Service, or ENS, formed a decentralized autonomous organization, or DAO, for the ENS community.  Cointelegraph spoke to two ENS DAO delegates who applied for the opportunity to represent the community and stay involved in the decision making process: Victor Zhang, CEO of AlphaWallet, an open source Ethereum wallet, and Gregory Rocco, co-founder of Spruce, a decentralized ID and data toolkit for developers. Zhang spoke about his experience as an external contributor to ENS and an early supporter since 2018. Zhang initially sought to help ENS by offering Alpha Wallet as a user-friendly tool for  resolving .eth names and cryptocurrency wallet addresses. Essentially, if a user inputs an .eth name in the AlphaWallet, it will show the wallet address, and vice versa using reverse resolution. Alpha...
Post a Comment
Read more

How Social Platform Chingari is Using Web 3.0 to Transform the Traditional Way We Use Social Media

The world is changing. This isn’t news to anyone, but sometimes it is nice to realize that—contrary to news headlines—not all the change is bad.  In fact, the last decade has seen so much innovation and so many improvements to technology that even 2015 seems like a different world.  Internet speeds, connecting with anyone globally (for free), and our ability to reach large groups of people without a middleman is nothing short of revolutionary. When it comes to technology evolution, this often happens with different iterations.  Once a system is mature, there’s a better idea of what we would like to change and improve.  We go back to the drawing board, target our creative minds at the issues, and create a new version that has evolved to better meet our needs.  The Internet has followed this model since its inception, evolving through three distinct stages.  We are only at the cusp of the third stage, called Web 3.0, with technologies such as blockchain and ...
Post a Comment
Read more

Lightning Network Exploits Continue to Hinder the Bitcoin Scaling Solution

via Bitcoin News https://ift.tt/3mGmODQ While bitcoin has run-up to all new price highs in 2020, a great number of crypto supporters have been complaining about the mempool backlog and the high fees needed to send a transaction. Meanwhile, the Lightning Network is far from seeing widespread adoption, and a number of attack vectors have been revealed this year. At the time of publication, the Bitcoin ( BTC ) mempool (backlog of transactions) shows 113,000+ unconfirmed transactions and the backlog hasn’t been this high since 2017. When the bull run took place three years ago, transaction fees and unconfirmed transactions shot through the roof. Currently, according to bitcoinfees.cash data on October 31, the next BTC block fee is $10.77 and the current median fee is $6.43. Even with the high fees and the mempool clog , the greater bitcoin community is still transacting mostly onchain. The Layer 2 protocol built on top of Bitcoin called the Lightning Network (LN) was supposed to eas...
Post a Comment
Read more