Home Cryptocurrency Fear & Greed Index hits lowest since March 2020 even as Bitcoin price hits $30.5K

Fear & Greed Index hits lowest since March 2020 even as Bitcoin price hits $30.5K

by Serge Shlykov

Despite the recent price increase, speculators are staying away from the market. The fear of investing in Bitcoin is greater than their greed for profits. Experts are predicting that this could mean a dangerous bubble is forming and will soon burst before it can hit its peak value again. Though cryptocurrencies have been booming over the past few months, many believe we might be seeing an end to all that good news with increased competition on top of declining prices and lack of use cases.

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Fear & Greed Index hits lowest since March 2020 even as Bitcoin price hits $30.5K

Bitcoin (BTC) rose above $30,500 on May 17 on hopes of avoiding a revisit of 2017 highs.

Fear & Greed Index hits lowest since March 2020 even as Bitcoin price hits $30.5K1 hour candle chart of BTC/USD (Bitstamp). TradingView (source)

‘Highly improbable’ retest for $20,000

BTC/USD climbed following the daily close, according to data from Cointelegraph Markets Pro and TradingView, to tentatively approach $30,000.

The pair had failed to settle on a substantial upward or downward trajectory in a multi-day range, and volatility had ebbed into the new week.

Concerns that a significant correction might push it below last week’s ten-month lows prompted popular analyst Credible Crypto to give a more upbeat alternative. Bitcoin has no drive to retest $20,000 or below, he said on Twitter, based on historical standards.

“The case for 13K-14K $BTC is based on the idea that previous significant bear markets have resulted in 80% falls from the peak,” he said.

“It’s the same assumption that folks had at 30k in June ’21, before we rallied to a new ATH of 65K three months later.”

According to Cointelegraph, contingency measures for such an occurrence seem to be in place already, with MicroStrategy — the firm with the biggest corporate BTC treasury — even preparing to purchase up supplies to arrest the decline.

Credible Crypto was equally cautious when asked whether BTC/USD may replicate the decline from its 2019 highs above $14,000 to the $3,600 floor during the March 2020 COVID-19 meltdown.

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“I hadn’t expected that.” Is it even possible? Yes, but as I’ve already said, a retest of past cycle highs has never occurred before, so I believe it’s quite improbable,” he replied.

It was an issue of the US dollar cooling its bull run against other fiat currencies, according to Cointelegraph writer Michal van de Poppe, to allow risk assets some breathing room.

He predicted that the US dollar index (DXY) will fall from its twenty-year highs of 105 points.

Fear & Greed Index hits lowest since March 2020 even as Bitcoin price hits $30.5K1-day candle chart of the US dollar index (DXY). TradingView (source)

“If I look at the current state of the $DXY, I think we’ll follow through with this scenario. Assuming we’ll be seeing some corrective move, the highs have been swept for liquidity. Losing 103.7 points and I think we’ll get more downwards pressure here -> risk-on assets up,” he tweeted on May 16.

The mood mirrors that of March 2020.

Meanwhile, market sentiment data echoed the general view in crypto – that anything could happen now, with a strong bearish tilt.

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The Crypto Fear & Greed Index, a cross-market sentiment gauge, hit 8/100 on May 17, its lowest value since March 28, 2020 — two weeks after the Coronavirus lockdown-induced meltdown.

BTC/USD was already rebounding from its lows at the time, as it is today. The pair was trading at $30,500, up 28% from the previous week.

Fear & Greed Index hits lowest since March 2020 even as Bitcoin price hits $30.5KCrypto Fear & Greed Index (screenshot). Source: Alternative.me

The author’s thoughts and opinions are completely his or her own and do not necessarily represent those of Cointelegraph.com. Every investing and trading choice has risk, so do your homework before making a decision.

The “fear psychology” is a statistic that measures the amount of fear and greed in the market. The fear index hit its lowest point since March 2020 even as Bitcoin price hit $30.5K.

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