The crypto market has entered a period of “extreme fear”, according to one metric, after the price of bitcoin and several other leading cryptocurrencies suffered a severe crash at the end of last week.
Bitcoin plummeted by more than $10,000 on Friday, briefly falling as low as $45,000 before staging a slight recovery over the weekend.
It has risen above $47,000 on Monday morning but remains a long way off the all-time high it experienced last month of close to $69,000.
Ethereum (ETH), Binance Coin (BNB), Solana (SOL) and Cardano (ADA) also saw heavy losses at the end of last week but appear to have steadied somewhat at the start of the week.
The cryptocurrency downturn has dented any hopes of new records before the end of 2021, though some analysts believe the “extreme fear” signal could be an impetus for some investors to buy back in while prices are relatively low.
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Crypto market in ‘extreme fear’
A popular metric for measuring crypto market sentiment has entered a period of “extreme fear”.
The Fear & Greed Index swung wildly to the left following the latest cryptocurrency crash, registering a score of just 16 compared to a score of 71 last month, when sentiment was pointed towards greed.
This is the lowest level since July, when the price of bitcoin briefly fell below $30,000. What followed was a solid market rally leading to new all-time highs, with some analysts and market commentators using the metric as a signal to buy. “Extreme fear, buy. Extreme Greed, sell,” one investor noted. “Rinse and repeat.”
Anthony Cuthbertson6 December 2021 10:49
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Anthony Cuthbertson6 December 2021 10:28