The leading social indicator called “Fear and Greed Index” developed by Alternative.me is one of the best ways to determine the current social mood in the cryptocurrency market. In addition to assessing the current state of the market, it can give us some clues about upcoming events.
According to the official website, the fear and greed index currently remains at 26, which marks the market as fearful. Finally, the market continued in “extreme fear”, a more aggravated version of the current level.
In Fear Mode, investors tend to steer their funds away from exchanges, refrain from trading large portions of their portfolios, and prefer to keep their funds in stable assets rather than investment vehicles that are less volatile than some cryptocurrencies.
Over the past two weeks, the Market Sentiment Index has been relatively flat as cryptocurrency market volatility stabilized following the FTX implosion. Despite the continued migration of funds from cryptocurrency exchanges to private wallets, panic in the market has subsided and the majority of investors have remained 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 the volatility of the market is an excellent condition to reassure 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 even lower than to bounce back at the next spike in volatility.
As of press time, bitcoin is trading at $17,159, showing the lowest intraday volatility we’ve seen in the last two months.