Bitcoin sentiment, as measured by the Crypto Dread and Greed Index (CFGI), has remained in the “severe fear” region for many weeks. While bitcoin gained some ground on Monday, the CFGI’s rating score of 16 out of 100 still places it in the “severe fear” category.
The Crypto Fear and Greed Index is still in the ‘Extreme Fear’ category.
The Crypto Dread and Greed Index (CFGI) entered the “extreme fear” zone with a score of 22 around 45 days ago. The 24-hour bitcoin price range on April 15 was between $39,823.77 and $40,709.11 per unit. Since then, markets have continued to fall, and on May 12, the value of Bitcoin fell to a new low of $25,401, which was lower than the previous low in July last year. If someone bought Bitcoin on May 12th, they would be up more than 24% versus the US dollar today.
Despite recent improvements, the CFGI remains in the “severe fear” zone, and the rating is lower than it was on April 15. The CFGI rating score is 16 out of 100 at the time of writing, but it doesn’t imply markets will stay that way.
The CFGI, which is hosted on alternative.me, gauges market mood and states that it is based on two basic assumptions:
- Extreme fear may indicate that investors are too concerned. That might be a good time to purchase.
- When investors get too optimistic, the market is ripe for a correction.
Extreme fear, on the other hand, might lead to further surrender, and the so-called buying opportunity may be significantly reduced. It’s also possible that the present time period is a tiered buying opportunity, with individuals content to purchase BTC on the way down. The CFGI’s basic assumptions are just that: they may be accepted as facts, but they may never be realized.
Similarly, just because “investors are growing excessively greedy,” as the CFGI claims, doesn’t guarantee crypto prices will correct. This implies that if someone followed such advise, they may end up selling BTC at a lesser price than they would have earned if they had waited. Then there’s the age-old financial wisdom that says it’s OK to profit along the road.
For well over a month, crypto market sentiment has been in the “severe dread” category, according to the CFGI. The index reached a ranking score of 10 yesterday, May 30, indicating that the current CFGI score of 16 represents an improvement. Following the recent Terra incident, Google Trends numbers for the term “bitcoin” reveal that interest has increased.
Surprisingly, data from Google Trends (GT) shows that interest in bitcoin has been waning for a time prior to the Terra LUNA and UST debacles. However, GT data reveals that the search term “bitcoin” had its best GT score (100) since the second week of June 2021 during that precise week (May 8-14). However, in the week after the Terra LUNA and UST market meltdowns, the GT data score for the phrase “bitcoin” fell by 45 percent.