Today I want to go take a look at Bitcoin's fear and greed index.

This index analyze the current sentiment of the Bitcoin market and develop the numbers into a simple meter from 0 to 100. Zero means "Extreme Fear", while 100 means "Extreme Greed".

We currently see that the index has even sunk to 9!

If we look at the trend in the graph of the last 3 months, we see that after a period of discrete positivity, the fear/greed index has had a sudden collapse, a consequence of the market dump of the last few days.

We had never reached this level recently. To have such a low value we have to go back to 22 August 2019, when the fear index dropped to just 5 points. Even in that period there was a sharp drop in the price of bitcoin where it dropped by about $ 1000 in a single day.

Contrariwise, the peak moment of the index (July 2019) coincided precisely with the bull run that led Bitcoin to reach the maximum values of the last 2 years. 

All this leads us to meditate: when operating on the cryptocurrency market, you must always put aside emotions such as fear and enthusiasm and be rational. In fact, often when the fear is very high, the index then tends to rebound, because it is very tied to the price of Bitcoin, which we know is in turn extremely volatile.

As also indicated by the site https://alternative.me/crypto/fear-and-greed-index/

- Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.

- When Investors are getting too greedy, that means the market is due for a correction.

A tip therefore is to monitor this index as it helps us understand what people's sentiment is, but you have to be careful because whoever reasons with emotions in this business is always a loser!

I think that only by using rationality and objectivity is it possible to survive in the world of cryptos.

I leave you with a famous phrase by Warren Buffett:

"Be fearful when others are greedy, and greedy when others are fearful"

And you, cryptoinvestors, are you afraid these days or are you still able to think rationally?