Data shows the sentiment among Bitcoin traders has plunged into the fear territory following the crash in the cryptocurrency\u2019s price.<\/p>\n
The \u201cFear & Greed Index<\/a>\u201d refers to an indicator devised by Alternative that tells us about the average sentiment that\u2019s currently present in the Bitcoin and wider cryptocurrency markets.<\/p>\n This metric makes use of a numerical scale that runs from zero to hundred for representing the market mentality. All values above the 53 mark correlate to the investors sharing a sentiment of greed, while those under 47 suggest the presence of fear in the sector. The region in-between these cutoffs corresponds to a net neutral sentiment.<\/p>\n Besides these three main regions, there are also two special zones known as the extreme fear and extreme greed. The former occurs below 25 and the latter above 75.<\/p>\n Now, here is how the latest market sentiment has looked according to the Bitcoin Fear & Greed Index:<\/p>\n As is visible above, the indicator has a value of 44, which suggests the traders in the sector are being fearful at the moment. This is a drastic change from how the market has been recently, as the below chart displays.<\/p>\n On the 31st of last month, the Bitcoin Fear & Greed Index had a value of 76, meaning that the market sentiment was inside the extreme greed territory. Just three days later, the trader\u2019s opinion has completely flipped.<\/p>\n The rapid deterioration in sentiment is a result of the bearish price action that the asset has witnessed this month, which has culminated in a crash<\/a> during the past day. If history is to go by, though, the skepticism that has developed among the investors may actually be a positive sign for BTC\u2019s price.<\/p>\n Bitcoin and other digital assets often tend to move in a direction that\u2019s opposite to what the crowd is expecting. The probability of such a contrary move taking place only rises the stronger the investors\u2019 belief becomes.<\/p>\n Extreme greed and extreme fear are where this likelihood is the strongest, so major tops and bottoms have historically formed when the Fear & Greed Index has been in these regions. The top last month, for instance, also occurred alongside extreme greed.<\/p>\n