Crypto Fear and Greed Index Might Be Hinting at Another Plunge

The prominent social indicator called "Fear and Greed Index" developed by Alternative.me is one of the best ways of determining the current social sentiment on the cryptocurrency market. In addition to evaluating the current state of the market, it may give us some hints on upcoming events.

According to the official website, the Fear and Greed Index currently stays at the value of 26, which marks the market as fearful. In the end, the market persisted in "extreme fear," a more aggravated version of the current level.

In the "Fear" mode, investors tend to move their funds away from exchanges, abstain from trading large parts of their portfolios and prefer holding their funds in stable assets on investment tools that are not as volatile as some cryptocurrencies.

In the last two weeks, the market sentiment index has been relatively stable as the volatility of the cryptocurrency market stabilized after the FTX implosion. Despite the continuing migration of funds from cryptocurrency exchanges to private wallets, the panic on the market disappeared, with the majority of investors staying calm in comparison to the same period around a month ago.

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Unfortunately, historical analysis of the chart shows such periods do not last long. A significant drop in volatility on the market is a great condition to calm down investors who have been selling most of their assets during the storm in panic, causing the state of "Extreme Fear." But the low volatility is temporary, and, according to corresponding indicators and factors, the market is more likely to drop further down rather than bounce with the next volatility spike.

At press time, Bitcoin is trading at $17,159 and showing the lowest intraday volatility we have seen in the last two months.