The latest Crypto Fear & Greed Index data show that the cryptocurrency market is going through a period of investor fear, with a low of 27 out of 100 in three months.
Using the leading crypto asset Bitcoin (BTC) as a representative of the markets, the old technical analysis tool informs cryptocurrency traders around the world about current market sentiment and bias.
This data can then be used – in line with other analytical strategies – to determine the likelihood of a future boom or correction, and ultimately whether price levels represent an opportunity to buy or sell the market.
A figure below 100 indicates a shift towards strong market concerns and that BTC may be undervalued, while a higher figure represents excessive market greed and that prices may exceed fair value, predicting a decline in the future.
After bitcoin fell 10.4% to $ 43,313 this week, the index showed 27 points. Bitcoin last reached this level about three months ago, on July 26th.
The index hit an annual low on July 21 with a score of 10, followed by a parabolic race to a five-month high of 79 by late August and early September. This volatility has been parallel to the entire cryptocurrency market, where prices are often quoted in double digits.
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Reddit user u / _DEDSEC_ adapted the popular trading mantra “Buy rumors, sell news” and commented that traders should “buy fear, sell greed.”