The crypto markets’ fear and greed index is at its lowest level of the year.
The index measures the degree of fear or greed in the crypto markets on a scale of 0 to 100, with 0 being absolute fear, and 100 being absolute greed. When it is at 50, it means that the crypto markets are neutral, meaning that there is no fear or excitement.
Yesterday’s figure, given that the latest figure refers to the previous day’s situation, indicates an extremely low value of 10. Not only is this the lowest value of the year, but the last time such a low value was recorded was on 30 March 2020, i.e. during those weeks last year when a general collapse of all the world’s financial markets caused the price of bitcoin to fall below $4,000.
It must be said that at the end of April 2020, i.e. one month later, it had already returned to the neutral zone, and even two months later, at the end of July, it passed into the zone of over-enthusiasm, i.e. around 80.
After a brief return to the neutral zone in September 2020, the index jumped to 90 in November, indicating considerable over-enthusiasm, which in fact lasted until almost mid-January 2021.
By the end of January, it had fallen back into neutral, but by February it was back up to 90, and remained there until almost the end of the month.
After a brief excursion below 40 in March, it rose again to 80, and remained there until mid-April.
The descent of the fear and greed index
Since the price of bitcoin started to fall in the second half of April, the index first fell to 70, then to 30 just before mid-May. With the recent plunges, however, it plummeted to 11 on 19 May and hit a one-year low of 10 yesterday.
Given that the price of BTC is now slightly higher than yesterday, it is possible that tomorrow will see a higher value than the one published today.
The panic on the crypto markets over the past few days was clearly evident, without a shadow of a doubt, so the index did nothing more than quantifying an already widely known trend.
It should be noted that in the past, the value of the fear and enthusiasm index has rarely remained so low for long periods of time, perhaps because panic is generally a fleeting emotional phenomenon, which often gives way to other emotions.