Market Minute: BFGI hits a new “extreme fear” level

By fklivestolearn | Technicity | 10 May 2022

The Bitcoin Fear & Greed Index is pointing to the worsening sentiment among the BTC traders and investors


At the time of writing this piece, Bitcoin and the other cryptos have sunk to new lows — replicating the extremely bearish momentum in Equities. The crypto market has become increasingly correlated with the stock market as large institutional investors like hedge funds have gotten into the market. BTC has now lost more than 55% of its value from the peak reached, in late 2021. Most of the Alt. coins including Ethereum have posted similar losses.

An aggressive Federal Reserve tightening is being labeled as the primary suspect for causing this, as the availability of easy money vanishes from the economy. The scale of the bearish sentiment can be gauged from the Bitcoin Fear & Greed Index (pictured above). The value of the index dropped to a new low — the current value of 25 is a startling reversal from just a month ago when the BFGI was pegged on the greed side with a value of 73.

The current reading of the BFGI suggests that sellers are far outnumbering buyers. The Bitcoin Fear and Greed Index provides a score from 0 to 100, where 0 is extreme fear, and 100 is extreme greed. BFGI is calculated on six different metrics, of which market momentum & volatility together contribute 50% to the weightage. The only silver lining in this fearful market is that falling prices eventually become more attractive for new buyers to get in and reverse the trend as we saw the last summer.

How long this bearish pressure lasts remains to be seen since the overall macroeconomic conditions currently are not comparable to what they were last summer — listen to our daily podcast for market overview and technical levels. Look for confirmation signs of a reversal before getting into this volatile market. At the time of publishing, this Bitcoin is trading around $30.2k and Ethereum is trending close to $2290.

 Originally Published on Medium

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Prolific Blogger on Medium with my own publication Technicity. Extensive trading experience in Forex & Stocks based on technical studies. Cryptocurrency trader and Enthusiast, Blockchain/Fintech Evangelist & generally just a Technology Freak.


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