Following the recent decline in the cryptocurrency market, in which bitcoin has lost nearly 20% of its value since its all-time high, the general sentiment among investors has changed drastically. The Fear & Greed Index has gone into a state of “Fear” for the first time in nearly two months.
Fear Is Back Again
The popular Bitcoin Fear & Greed Index is a metric that follows several factors within the digital asset community to reveal the momentary sentiment towards the leading cryptocurrency. Such segments include volatility of the asset, volume, social media comments, surveys, and more. The Index provides results ranging from 0 (“Extreme Fear”) to 100 (“Extreme Greed”). Currently, the metric has dropped to 34 – “Fear” territory.
It is worth noting that the last time the Index went to this state was October 1. Back then, bitcoin’s price tag stood at around $42,000. Throughout October, though, the cryptocurrency saw significant advancements, with perhaps the most notable one being the launch of ProShares Bitcoin Strategy ETF – the first futures-backed ETF in the United States. Shortly after, the digital asset’s USD value skyrocketed and reached an all-time high of nearly $65,000.
Other factors aiding bitcoin’s surge in the last two months included reassurance from the SEC and the Federal Reserve that the US will not ban cryptocurrencies.
Furthermore, the government of Russia announced a complete crackdown on cryptocurrencies (the way China did it) is not on its agenda. President Putin even noted that bitcoin and the alternative coins could one day become a means of payment.
The first ten days of November were also highly successful for BTC. Last week, it surged to a new all-time high of $69,000, while its market capitalization touched $1.3 trillion for the first time.
Nonetheless, the cryptocurrency industry experienced a significant correction in the past week, and bitcoin lost some serious ground. At the moment of writing these lines, it is trading at around $57,000, and somewhat expectedly, investors’ feelings changed into “Fear.”
Is It Time to ‘Buy The Dip?’
While the word “Fear” might look like a stop sign to some people willing to enter the digital asset market, it is not always the case. Many experts in the space believe that the cryptocurrency being in that state or even “Extreme Fear” is actually a good buying option.
The third-largest bitcoin whale seems to have the same opinion, and two days ago, they purchased another 1,647 BTC at a price of less than $60K. The total amount equaled nearly $100 million.