The year extreme fear took over the crypto market

The year 2022 has so far seen the crypto market spend most of its time in fear territory, with a large portion of it particularly deep in extreme fear.

Crypto Fear and Greed Index Continues to Point to ‘Extreme Fear’

According to the latest weekly report from Arcane Research, the market has continued to be fearful without any breaks for 178 days now.

The “Fear and Greed Index” is an indicator that tells us about the general sentiment among investors in the crypto sector.

The metric uses a numerical scale ranging from zero to one hundred to represent this sentiment. Any value above 50 indicates that investors are greedy right now, while those below the threshold suggest a terrible market.

Values ​​of more than 75 and less than 25 towards the end of the range suggest feelings of “extreme greed” and “extreme fear”, respectively.

Now, here is a chart showing the trend of the Crypto Fear and Greed Index over the past year:

The value of the metric remains quite low | Source: Arcane Research's The Weekly Update - Week 38, 2022

As you can see in the graph above, the crypto fear and greed index has continued to be at a low value in recent weeks.

The current value of the indicator is 20, which means that the market sentiment is extreme fear at the moment.

In total, investors have been fearful for 178 consecutive days now, the longest streak since the metric was created back in 2018.

For much of this time, the crypto market has actually had an extremely fearful feel. Before the relief rise in the prices of coins like Bitcoin back during August, the sector saw a record high of fear.

In total during the year 2022, the indicator has spent very few days in the area of ​​greed. Extreme fear has taken over the market for much of the time, and when there hasn’t been bottom sentiment, there has still been fear around the minds of investors.

Historically, the relevance of extreme fear territory has been that cryptos like Bitcoin have generally observed bottoms during stretches of such deep emotion.

The report notes that while accumulating during these periods can be a good strategy, investors should be aware that the dreaded feeling can last much longer.

BTC price

At the time of writing, Bitcoin’s price is hovering around $19k, down 1% in the last week.

Looks like the value of the crypto has already come down from the surge a couple of days ago | Source: BTCUSD on TradingView

Featured image from Natarajan sethuramalingam on Unsplash.com, charts from TradingView.com, Arcane Research