The leading social indicator called “Fear and Greed Index” developed by Alternative.me is one of the best ways to determine the current social sentiment in the crypto-currency market. In addition to assessing the current state of the market, it can give us some clues as to what’s to come.
According to the official website, the fear and greed index currently remains at the value of 26, which marks the market as fearful. Finally, the market has persisted in “extreme fear”, a more aggravated version of the current level.
In Fear Mode, investors tend to keep their funds away from exchanges, refrain from trading large portions of their portfolios, and prefer to hold their funds in stable assets on investment tools that are not as volatile as some cryptocurrencies.
Over the past two weeks, the Market Sentiment Index has been relatively stable as the volatility of the crypto-currency market has stabilized after the FTX implosion. Despite the continued migration of funds from crypto-currency exchanges to private wallets, the panic in the market has disappeared, with the majority of investors remaining calm compared to the same period about a month ago.
Unfortunately, historical analysis of the chart shows that such periods do not last long. A significant decrease in market volatility is an excellent condition to calm investors who sold most of their assets during the storm in panic, causing the state of “Extreme Fear“. But the low volatility is temporary and, depending on the corresponding indicators and factors, the market is more likely to fall further than to rebound at the next volatility peak.
As we go to press, bitcoin is trading at $17,159 and has the lowest intraday volatility we’ve seen in the last two months.