In the past year, the price of bitcoin and with it the entire crypto market has taken a big dive. Several large companies and projects from the world of cryptocurrencies have also gone under. With this, the sentiment was not to write home about, to say the least.
Fear & Greed on the crypto market
The crypto market, like any other financial market, is driven by fear and greedie fear and greed. The Fear & Greed Index indicates on a scale of 1 to 100 how the market sentiment is at that moment. A low score indicates fear and a high score indicates greed. When looking at previous market cycles, it can be seen that a bull run always ends in euphoria. At times like this there is a lot of greed among crypto investors and many people already see themselves driving around in a Lamborghini. There is suddenly a lot of interest in crypto from people around you.
On the other hand, nobody believes in bitcoin (BTC) and altcoins anymore when the price is around a bottom. Fear dominates the market and many investors sell them holdings at moments like this.
Pre luna crash
Since the start of the new year, the crypto market has been on a nice upswing. The price of bitcoin is about 40% higher than on January 1. The Fear & Greed Index has also risen sharply as a result. On January 1, it was still at 26, but it has now exactly doubled to a value of 52. 26 belonged to the category ‘fear’ and 52 belongs to the category ‘neutral‘.
This brings market sentiment to levels last seen before the demise of the Terra ecosystem (LUNA) in May 2022, as early April was the last time the index rose above 50. In June, amid financial troubles at crypto lending platform Celsius and crypto hedge fund Three Arrows Capital, the Index found its bottom at a reading of 6.