Bitcoin Fear Index at 10

[ImThour]

What do you think how it will play this time? I am sure we are bouncing back from here in a day or so.

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[Wilhelm]

Fear is the beginning of good things

[aoluain]

Great graphic!

Everyone should see this, it might help as an aid to "stop selling" because this is a great "Buy" signal.

I check this a few times per week and "10" is the lowest I have seen since I started checking it.

https://alternative.me/crypto/fear-and-greed-index/

Why Measure Fear and Greed?

The crypto market behaviour is very emotional. People tend to get greedy when the market is rising which results in FOMO
(Fear of missing out). Also, people often sell their coins in irrational reaction of seeing red numbers. With our Fear and Greed Index,
we try to save you from your own emotional overreactions. There are two simple assumptions:

    *Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.
    *When Investors are getting too greedy, that means the market is due for a correction.

Therefore, we analyze the current sentiment of the Bitcoin market and crunch the numbers into a simple meter from 0 to 100.
Zero means "Extreme Fear", while 100 means "Extreme Greed". . .

[mk4]

Fear is quite high but still not enough in my opinion. If the markets wanted to do some sort of wash-out, we're going to need more blood. Heck, normies on Reddit still aren't panicking it looks like.

But hey, who knows. The Fear Index is very likely to be a bad gauge to use in the first place.

[thecodebear]

Yeah it is definitely starting to look like indicators of the bottom are starting to flash. I'd be pretty surprised if bitcoin isn't heading up by end of the month, or at least next month. Fear is at a high with loads of people saying crypto winter is here (just like in July), some death cross is being hit right now which tends to be a lagging indicator, other technical and support signs suggest a possible bottom around $38k - $40k. I'd say there's a good chance that in a month or two all these panic sellers are buying back in higher and everyone is talking about how this was such a healthy correction to a higher long term bottom. That's my take anyway. Always possible that more support levels fall if more people panic, but regardless the downtrend if only going to be a temporary thing, and we're likely most of the way through it in terms of percentage of drop.

[cafucafucafu]

It's funny how people are panicking right now, and these are the same people who were FOMOing hard at the top.

At the end of the day the bull market was always going to be unsustainable, and everyone should have known that. There was no way that BTC was going to grow at 300% APY no matter how much people try to convince you otherwise.

People lost a lot of rationality during this bull market due to the Fed's easy monetary policy and QE. Now that is reversing, overleveraged traders will be in for a rude shock, as well as retail investors who only know low interest rate environments as the norm.

[rhomelmabini]

Was it a proven tool that if it goes to that level we could bounce back? If so that's a great but we may never know as it could go lower since 10 isn't the lowest yet.  Maybe we just need some silence from here on out then comeback again for the next month or two.

I think that 39600 was the best support we've got right now and if it broke that I don't know but will keep on waiting.

[Kemarit]

Was it a proven tool that if it goes to that level we could bounce back? If so that's a great but we may never know as it could go lower since 10 isn't the lowest yet.  Maybe we just need some silence from here on out then comeback again for the next month or two.

I think that 39600 was the best support we've got right now and if it broke that I don't know but will keep on waiting.

Luckily, the support level at $40,000 is still holding so for now we are safe that it won't go down at least for now. But in any case that support is broken then it could be a buying opportunity for all of us. Of course there is still a chance that we will come back again, but reading the price movement and the technical analysis, we might be in a rude awakening that the bear market is for real and it's staring at us right now. But let the dip be our friend and look at it as a buying opportunity.

[GreatArkansas]

Here's the current Bitcoin fear index.

It looks like the 20 index is acting support here, it's just bouncing. So this could be the start of the accumulation area if ever 20 will hold.
With the last year, it seems the lowest was 19. So, it's more likely we are testing it again now.
But the worst was dropping at 10, awts.

Overall, for me, 10-20 is my bid area. Even if you check RSI indicators, it is showing that those area also oversold area.

[Fundamentals Of]

Maybe not in a day or two but the bounce will be guaranteed to happen. I could bet all my wealth in it. That's what I'm saying especially to some friends who are now also feeling the fear that the market seems to cause.

There is no reason to panic really. Any market will experience highs and lows. There is no market that is always bullish. There should be that bear season because it cannot be avoided for some people to sell. And when the selling pressure is strong, it is logical that the price will fall. But the selling cannot be stronger than the buying all the time.

[BitcoinBarrel]

Fear is low, will take another 20-30% correction to get the panic selling started. Lots of people got in on the bull run and really think the total crypto market cap can double or even triple in the coming months.

[STT]

Fear could be worse but the wider market expects hard money from FED policy which means the fear could have a wide breadeth rather then especially focused on Bitcoin or crypto alone.   I doubt we get anything close to hard money but the idea and withdrawal of speculative money is real enough to bring us back to previous pricing.
  Its not nearly as bearish as it could be, price recently has been capped by the 2 day average but is breaking past that to challenge the 7 day average.   Its only a rough measure of momentum but even selling can become exhausted and so we naturally challenge higher prices and the cycle changes.

[pinggoki]

Fear is low, will take another 20-30% correction to get the panic selling started. Lots of people got in on the bull run and really think the total crypto market cap can double or even triple in the coming months.

I don't know about that but I think that people are starting to panic sell already if not have done it already, pretty sure that a lot have panic sold when bitcoin dipped in 40k but you're right that it's a bit low but a low fear index don't mean that there's not a lot who has already sold. Hopefully many people deserving of profit, get something out of this current situation.

[Gozie51]

Fear is low, will take another 20-30% correction to get the panic selling started. Lots of people got in on the bull run and really think the total crypto market cap can double or even triple in the coming months.

You mean price is going to keep falling with the percentage you reference. This may not be that way, 20% to 30% fall in price won't be good for bitcoin and I don't expect that incident of 2018 to repeat this time. Meanwhile bitcoin continue to recover after a fall and that gives hope for hodlers to hang on for the next bull.

[adaseb]

So the fear right now is 10 and back in Nov-Dec 2018 when all hell broke loose and bitcoin broke $6K support and kept going down and down and down to $3.5K the fear was only 11.  This gauge just doesn't seem that accurate. I don't think there is more fear now than in Nov/Dec 2018. Back then people were thinking bitcoin is going to $1K. Right now many people still think its going to go to $100K.

Also the fear during covid was 9, and I remember trading that day when Bitmex went down, and let me tell you. There is no way if BTC breaks $40K again and heads down to $35K and the fear prints a 9 that its as fearful as the march covid19 sell-off. Its either that or there are just more retail hands now which are way more fearful than the previous cycles.

[hugeblack]

Can someone explain to me how these scales work? Or how to collect data and determine the measure of fear or anxiety?
Funny that about a year ago I sold some bitcoin at $41,000 when bitcoin first rose from $10k to that top and today I don't want to sell at these levels because I think the price is too cheap.

In general, some still expect that the price will go to $100,000, and since the excessive optimism has ended (before the end of December), I expect that we may see more green candles soon.

[OgNasty]

I am still a bit let down we didn't see a massive bubble and pop that would have put Bitcoin all over the news and created lots of amazing content to enjoy.  I don't really understand where the fear comes from.  We still seem to be stuck in a trading range since breaking out early last year to new highs.  Granted it's a large trading range, but nothing to be fearful of, at least not yet...  I read somewhere that if your mood is effected by the volatility of an asset, then you are too overexposed to an asset.  That's how you know.    Don't be fearful, be more diversified. 

[batang_bitcoin]

It's better to see a lot are fearful than greedy. It's more fearful when we see that there are too many people that are greedy. Just always do what the whales are doing.
And if they're buying then do what they've been doing just like these bloody weeks, that's what they did at the start of the year. They're keeping as many bitcoins as they can and preparing of what's about to come as a bull.

[Lucius]

Can someone explain to me how these scales work? Or how to collect data and determine the measure of fear or anxiety?

Out of curiosity, it would be interesting to find out, but in the big picture, such data are more than insignificant and serve to manipulate the market. The fear we are talking about here stems from the fact that more than 80% of Bitcoin investors do not understand even some basic things, you easily sell them a story about China or Kazakhstan as many times as you want and they bite the bait.

In general, some still expect that the price will go to $100,000, and since the excessive optimism has ended (before the end of December), I expect that we may see more green candles soon.

With the exception of last year, January and February were not part of the year in which Bitcoin made any gains, and over the years it has been thought that this is because it is time to file taxes. In addition, realistically speaking, this is the period that comes after the big financial spending for the Christmas and New Year holidays, and now is the time to tighten the belt a bit.

Add to that a pandemic that is literally raging around the world, and it is predicted that in the next 2 months as many as 50% (250 million) of the EU population will be infected + inflation that is visible at every turn, I would conclude that the price Bitcoin currently holds is more than decent.

[palle11]

It's better to see a lot are fearful than greedy. It's more fearful when we see that there are too many people that are greedy. Just always do what the whales are doing.
And if they're buying then do what they've been doing just like these bloody weeks, that's what they did at the start of the year. They're keeping as many bitcoins as they can and preparing of what's about to come as a bull.

An experienced bitcoin trader should already know how bitcoin movement happen that usually after the bull comes correction and the correction can keep dipping until investors starts to enter again. This was what happened during 2018 to 2020 . Whales may not determine market to move when it is already have not got to support level