Why the Crypto Fear and Greed Index Points to a Sustained Recovery

Why the Crypto Fear and Greed Index Points to a Sustained Recovery

The Crypto Fear and Greed Index shows that while investors remain cautious, market sentiment is making a sustained recovery.

Crypto Fear and Greed Index Rises but Remains in “Fear” Territory

According to the latest weekly report from Arcane Researchmarket sentiment rose on Saturday to its best sentiment since April of this year.

index of fear and greed” is an indicator that measures the general mood among investors in the crypto market.

The metric uses a numerical scale ranging from zero to one hundred to represent this feeling. Any values ​​above 50 indicate a greedy market, while those below indicate fearful investors.

Values ​​near the end of the range above 75 or below 25 indicate “extreme greed” and “extreme fear” feelings, respectively.

Historically, bottoms have tended to form during periods of extreme fear, while tops have occurred during other extreme feelings.

Because of this, some investors consider that the first periods bring with them ideal buying opportunities, while the others can be suitable selling points.

Now, here’s a chart showing the trend of the crypto fear and greed index over the past year:

Looks like the value of the metric has been steadily climbing up in recent days | Source: Arcane Research's The Weekly Update - Week 30, 2022

As you can see in the chart above, a little while ago the crypto fear and greed index was inside extreme fear territory for several months, making it the longest streak of the bottoming mentality.

However, over the past few weeks, the indicator has seen some growth as various coins in the market have experienced a simultaneous recovery.

At the time the report came out (which was yesterday), the fear and greed index had a value of “31”. This implies a tremendous market.

Sentiment has improved slightly today as the indicator is now at “34”, which is still firmly within fear territory.

Why the Crypto Fear and Greed Index Points to a Sustained Recovery

The value of the indicator is 34 at the moment | Source: Alternative

On Saturday, the metric came close to stepping out of fear territory as it reached a value of “42”. This is the highest value the indicator has seen since April. But before the greed broke out, the fear and greed index fell again.

The latest trend suggests that investors have remained cautious, while market sentiment is improving. This could pave the way for a slower but more sustainable market recovery.

BTC price

At the time of writing, Bitcoin price hovers around 23.3 thousand dollars, which represents a growth of 9% in the past week.

Why the Crypto Fear and Greed Index Points to a Sustained Recovery

The value of the crypto seems to been trending sideways during the last few days | Source: BTCUSD on TradingView
Featured image from Quantitatives on Unsplash.com, charts from TradingView.com, Arcane Research



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