Climate of Fear Continues in Bitcoin and Altcoins! What Level of Sensitivity?

The fear and greed index, which measures market sentiment in Bitcoin, is in a state of extreme fear with 23 points.

The fear and greed index, which is calculated based on the trends of market volatility, market volume acceleration, social media interest, Bitcoin dominance graph and the types of research on cryptocurrencies on the internet, has been moving at fear and extreme fear levels for a long time.

When the price chart is examined, it is much more likely that the market is approaching the bottom levels when the fear and greed index shows “extreme fear” situations.

Because the periods when everyone is “fearing and expecting a fall” are usually experienced when the bottom is at or close to being found.

Although this data alone does not indicate that the bear market is over, many such on-chain data show that we may be at the bottom. However, looking at macroeconomic events, it is seen that not only cryptocurrencies, but all markets are moving in a downward direction.

For this reason, Bitcoin, which has become a global investment tool, is getting harder to see the bottom level as the economic events in the world do not improve.

Markets Overview

Cryptocurrency markets have been experiencing a bear season since late November 2021. Bitcoin price experienced a continuous decline after peaking at $ 68,900 on November 10, 2021.

bitcoin from $68,900 to $17,700 in this process, Ethereum It fell from $4850 to $880 levels.

The main reason for the ongoing bear season in cryptocurrencies is not FUD news. As mentioned earlier, central banks are increasing interest rates due to global macroeconomic conditions. Investors who see the increase in return turn to interest because the interest is completely risk-free.

In this case, money comes out of the already risky cryptocurrencies and shifts to the less risky ports.

On the other hand, since the gains are very high in the rising seasons of cryptocurrencies, the majority in the industry “who wants to get rich soon” made up of ignorant investors. As unconscious investors who enter the sector, usually at the peak of the market, show a sudden reflex in the moments of decline, the declines can be deeper.

When we look at it, it is very important to experience such bear seasons in certain periods in every market, to reduce volatility in cryptocurrencies and to realize correct pricing. Thus, after each bear season, the place of cryptocurrencies in the financial markets is getting stronger with more informed investors.