Crypto Fear And Greed Index Score At Lowest In 171 Days With Investor Sentiment Indicating ‘Extreme Fear’

Crypto Fear And Greed Index Score At Lowest In 171 Days With Investor Sentiment Indicating 'Extreme Fear'

A day ago, the value of bitcoin fell to $40,517 per unit just after noon EST which pushed down the Crypto Fear & Greed Index (CFGI) to “extreme fear” with a score of 10.

The CFGI is an analysis of the emotions and sentiments of investors towards bitcoin and other large cryptocurrencies and is measured by alternative.me each day based on data from multiple sources.

The CFGI is important because investor behavior in the crypto market is very emotional. Investors tend to be filled with greed when the market rises – resulting in the Fear of Missing Out (FOMO). And they become panicky and sell their coins in irrational reaction to a drop in the crypto market. The CFGI aims to prevent this emotional behavior and overreactions.

The CFGI assumes that extreme fear of the crypto market can be a sign that investors are too worried which could be a buying opportunity. And when greed among investors is high, it can indicate that a correction can happen in the market.  

The CFGI is measured on a scale of zero to 100 with zero denoting “Extreme Fear” and 100 indicating “Extreme Greed”.

The CFGI value on Saturday was at 10 –last seen in the crypto market 171 days ago on July 21, 2021.

This week, billions in value were lost by digital currency markets with the largest cryptocurrency bitcoin losing almost 10% of its value in t h last seven days. The price of bitcoin hit its lowest value since the end of September last year – touching a low of $40,517 at the end of Saturday.

Global trade volume in bitcoin on Saturday was about $23.6 billion.

The crypto exchange where the largest volume of bitcoin was traded on Saturday was FTX.US, followed by Coinbase, Bitfinex, Kraken, and Bitstamp. Global trading volume of bitcoin was only about 23.69% of the $99.6 billion in trades of all of the crypto assets traded on Saturday. Bitcoin’s 24-hour range on Saturday has been between $40,517.66 and $42,702.09. And on Saturday, the CFGI value as displayed on the web portal alternative.me was at 10 – pointing towards “extreme fear” among crypto investors.

The last time the CFGI was this low was back on July 21 last year. Since then the CFGI score has varied a lot. For example, the CFGI score was 21 on Saturday last week and at 29 a month ago.

The CFGI accounts for various factors affecting crypto investors with separate weightage to each of the factors. Volatility of the market and market momentum or volume accounts for 25% each of the scores while social media sentiments and surveys account for 15% each in value of the CFGI. The other two factors that make up the CFGI score are the dominance of a crypto coin and search trends – each making up 10% of the CFGI.

As of Saturday, bitcoin noted a surge of only 6.4% year-to-date but is currently about 39% lower than its all-time high attained by it on November 10, last year. But compared to its value on July 6 of 2013 – when its price was at $67.81 per coin – bitcoin is up 61,932.6%.

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