Fear returns with revenge after the collapse of the crypto market of 400 billion dollars

Fear returns with revenge after the collapse of the crypto market of 400 billion dollars

The sense of the crypto market has changed dramatically in light of events happening in space. The index of fear and greed, which monitors mood through metrics and puts data into four categories, showed that investor sentiment has jumped again. This time, the return of the market to the territory of extreme fear, signaling the return of the sale of the market.

Investors are losing faith

After spending a long period of time in the territory of greed last year, the Index of Fear and Greed returned to the territory of fear after great falls at the end of the year. It fell to its lowest level of 11 on the chart in early 2022, as the market spent most of the month in an area of ​​extreme fear. A small turnaround in the market has brought it to a neutral state, but that will only last for a short time.

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The crypto market has now returned to extreme fear after touching greed again for the first time in the fall months. This coincided with the recovery of bitcoin above $ 40,000, which took most of the market with it. However, as geopolitical and macro uncertainty remains a major problem, this has affected sentiment in broader financial markets and this has spilled over into cryptocurrencies.

Crypto Fear & Greed Index | Source: Arcane Research

The index opened on Wednesday in an area of ​​extreme fear with a low score of 25. The sentiment for the new year remained largely low, and with expectations that ‘crypto winter’ will spread widely, sentiment could continue to decline. Indicators point to more declining trends in the coming weeks. This along with growing social and financial problems, investors are more cautious than ever.

The crypto market cancels $ 400 billion

Only in the first two months of 2022, the crypto market experienced turbulent times. Entering the new year with more than $ 2 trillion in total market capitalization, it has since experienced a huge drop that has caused over $ 400 billion to be taken off its market capitalization.

Fear returns with revenge after the collapse of the crypto market of 400 billion dollars

Total market cap down to $1.7 trillion | Source: Crypto Total Market Cap on TradingView.com

These ups and downs were accompanied by a mood that turned negative, and top assets in space lost 50% or more of their all-time highs. The crypto market now stands at $ 1.78 trillion, nearly $ 200 billion less than last week when another crash led to it losing more value.

Related Reading | Bitcoin bloodshed continues, the bear’s grip is placed on the territory of extreme fear

Low momentum is still the order of the day among more resources. And since investors are skeptical about putting money on the market, a recovery is not in sight at the moment and overall market capitalization may remain low.

Featured image from Northstar Church, charts from Arcane Research and TradingView.com

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