As the crypto fear index drops to a two-year low, market sentiment is dangerously negative
The bearish feeling in the cryptocurrency market has returned. Since the Terra crisis began and investors hurried to get out of the market, this has been brewing. As a result of this, and concerns that the market is about to enter one of the longest bear markets ever, sentiment has plummeted to depths not seen before 2020. For a long time, the crypto market attitude has been negative. The majority of the previous two months had been spent in terror, with April ending in intense fear.
Nonetheless, until the LUNA catastrophe, the Fear & Greed Index scores had stayed rather high. The fact that the index had dropped to 8 last week is much more noteworthy. This is the second-lowest score ever recorded on the index, with a score of 5 in 2018 being the lowest. There had been some recovery since the lows on May 17th, but even that had not held up well. The index has now dropped another point to 11, as of the time of writing.
This strong fear reading reflects how investors are now feeling about investing in cryptocurrency. Simply put, investors do not want to put money into the market, as indicated by the recent exchange inflows that have shaken the market.
Nonetheless, it is still recognized as one of the most straightforward buy signs ever. It is quite popular since traders and investors frequently try to utilize market sentiment to determine when the market is at its bottom and enter at the proper time. These are mostly used to track the most popular cryptocurrencies on the market, such as Bitcoin and Ethereum. However, there is no such thing as an exact science in a highly volatile market like the crypto market. So, while ‘purchasing the blood’ might have positive benefits, it can also produce negative results.