Data shows the Bitcoin Fear & Greed Index has slipped back into the fear territory following the crash in the cryptocurrency\u2019s price.<\/p>\n
The \u201cFear & Greed Index<\/a>\u201d refers to an indicator created by Alternative<\/a> that tells us about the average sentiment present among traders in the Bitcoin and wider cryptocurrency markets.<\/p>\n The index uses the data of the following five factors to determine the investor mentality: volatility, trading volume, market cap dominance, social media sentiment, and Google Trends.<\/p>\n It then represents the calculated sentiment as a score lying between zero and hundred. All values above 53 correspond to a net sentiment of greed, while those under 47 imply the presence of fear in the market. A value between these two thresholds naturally corresponds to a neutral mentality.<\/p>\n Now, here is how the sentiment among Bitcoin traders is currently like, according to the Fear & Greed Index:<\/p>\n As is visible above, the index has a value of 45 at the moment, indicating that the investors are fearful, although only to a slight degree. The fear value is a new shift for the market, with this being the first time since September 7th that the metric has dipped into the zone.<\/p>\n The worsening of sentiment is a result of the bearish price action that Bitcoin and other digital assets have faced recently, with prices across the sector observing a particularly sharp drop during the last 24 hours.<\/p>\n The turn to fear, however, may actually not be a bad sign for the market, if the past is anything to go by. Historically, BTC and company have tended to move in the direction that goes contrary<\/a> to the expectations of the crowd. The probability of such an opposite move occurring generally only goes up the more sure the traders become of a direction.<\/p>\n On the Fear & Greed Index, there are two regions where this likelihood becomes the strongest: extreme fear (below 25) and extreme greed (above 75). The former is where major bottoms have occurred in the past, while the latter has facilitated top formations.<\/p>\n While the investor sentiment is currently far from turning into extreme fear, the fact that investors are no longer greedy could still be a positive for the bull run\u2019s hopes. It only remains to be seen, though, how things would play out for Bitcoin and other cryptocurrencies.<\/p>\n In some other news, the latest market crash induced a large amount of liquidations in the derivatives market, but speculators haven\u2019t become discouraged by the squeeze, as CryptoQuant community analyst Maartunn has explained in an X post<\/a>.<\/p>\n