Fear, blood, a spider and a black rose

Because the downtrend within the crypto market continues, so does excessive concern. What’s inspiring the sell-off? Is it Omicron? Or is it Evergrande? Is it a conspiracy? Or is it the vacations? All these questions and extra have had the Worry and Greed Index pointing left for a month straight. What does this imply? The place will we go from right here? That’s what we’re right here to discover. 

Associated Studying | Blood In The Streets: Crypto Market Turns into Fearful As Bitcoin Dives

However first, let’s discuss concerning the Worry and Greed Index. One of many many Bitcoin indicators, it measures the market’s basic sentiment in the intervening time. Zero is excessive Worry. 100 is excessive Greed. And the indicator oscillates between these two at any given time. It’s been mentioned that the crypto market may be very emotional. The Worry and Greed Index is there to maintain traders from making irrational choices based mostly on sentiment alone. 

Fear And Greed Index, Extreme Fear

Worry And Greed Index reveals Excessive Worry | Supply: Arcane Analysis’s The Weekly Replace

What’s The Worry And Greed Index Saying Now?

In line with Arcane Analysis’s The Weekly Replace, concern has settled in:

“The Worry and Greed Index has now signaled “Worry” or “Excessive Worry” for nearly one month straight. The final time we noticed such a chronic fearful market sentiment was originally of the summer season when the market sentiment was fearful for greater than two months straight. With the sustained consolidation of bitcoin, the late autumn euphoria has dampened, and the general sentiment appears very destructive in the intervening time.”

The report additionally says that, “throughout regular sell-offs, bitcoin tends to outperform the general crypto market.” And this time was no exception, BTC “outperformed all indexes up to now in December, seeing a destructive return of -18% after a comparatively flat second week of buying and selling this month.” Alternatively, “the Small Cap index has seen a lack of almost a 3rd of its worth in December.“ What does this imply usually?

“The bitcoin dominance has risen by 1.13% within the final week. That is the third time we’re seeing bitcoin dominance backside at 40% in 2021. The final two occasions had been Might nineteenth and Sep thirteenth. Plainly the 40% threshold is a troublesome space for alts to maintain”

BTCUSD price chart for 12/15/2021 - TradingView

BTC worth chart for 12/15/2021 on Eightcap | Supply: BTC/USD on TradingView.com

What Can We Anticipate In The Future?

To get our dose of technical and on-chain evaluation, let’s give the mic to this month’s Worry & Greed Index Publication:

“A significant factor right here is the cycle assist band. We can not ignore the truth that Bitcoin had simply closed 2 consecutive weeks under the market assist band. Traditionally, this meant that we’d see an extended consolidation part earlier than we may have a real reversal within the development. The takeaway right here is that this, so long as Bitcoin closes the week under the cycle assist band, we shouldn’t anticipate any main breakout in worth to happen.”

Each canine has its day, although. Every week in the past, analyzing a really comparable market sentiment, NewsBTC knowledgeable you:

“A “Worry and Greed” Index on Excessive Worry ranges, in keeping with sure analysts, has traditionally preceded crypto market native bottoms. Nevertheless, a run into new highs may see an impediment because the macro-economic outlook flip complicated.”

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It’s additionally necessary to keep in mind that solely two months in the past, we had been in an identical scenario and the sentiment did a whole 180 in a matter of weeks. 

“The indicator dipped all the way in which all the way down to excessive concern on thirtieth September, however in beneath two weeks the sentiment has already rebounded again to excessive greed. The report notes that this reveals how briskly the sentiment can change among the many crypto market.”

With that being mentioned, and a disclaimer that this isn’t monetary recommendation, in a scenario like this there’s just one factor lets say… hodl the road! 

Featured Picture: PublicDomainPictures on Pixabay| Charts by TradingView

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