As the Bitcoin (BTC) price drops below the $ 29,000 threshold, investor sentiment is souring and the Crypto Fear and Greed Index dips to its level in October 2020.
On January 22nd, the Crypto Fear and Greed Index fell to 40, shifting market sentiment from extreme greed to fear. The index fell to this low for the first time since October 3, 2020, when Bitcoin was trading at around $ 10,500.
Like the Fear and Greed indices in the traditional markets, the Crypto Fear and Greed Index is a tool that measures two key sentiments affecting the willingness of investors to buy a cryptocurrency such as Bitcoin.
According to Alternative.me, an extreme level of fear could be a sign that investors are extremely anxious, which could mean a good buying opportunity. On the contrary, when investors become very greedy, it could be a sign of a correction in the market.
Before the Crypto Fear and Greed Index reached 40, it already peaked on January 6, indicating that investors have become extremely greedy for bitcoin, and peaked at $ 42,000 on January 8. 21
As Bitcoin underwent a drastic correction in recent days, some in the industry commented on the price action. On January 21, Guggenheim’s chief investment officer, Scott Minerd, predicted that Bitcoin would drop to $ 20,000. Management still thinks Bitcoin will reach $ 400,000 in the long term, but not this year.
Mike Novogratz, founder of Galaxy Digital, is confident that Bitcoin will grow again. On January 21, he tweeted: “Humans are not intended to live in an environment of 150% volume. It was out of date. When the volume drops again, we will stop and stop and resume the rise.”
At the time of publication, the Bitcoin price has dropped to around $ 31,000. According to the Cointelegraph Bitcoin Price Index, the world’s largest cryptocurrency has decreased by more than 10% in the past 24 hours, but is still up by nearly 30% in the last 30 days.