When the Bitcoin price fell below $39,000 for the first time since March 15, most market participants began actively selling their crypto while waiting for another significant drop in the leading cryptocurrency and altcoins.
“Extreme fear” now prevails in Bitcoin price & crypto market
The famous “Fear and Greed” indicator is currently sitting at the value of 23, suggesting the market is in extreme fear and will most likely remain in it until Bitcoin retraces back to $40,000.
Since April 12, the Fear and Greed index has not moved above the 30 value, which shows that the market has remained uncertain for two weeks now. A drop in both social and market sentiment came after Bitcoin failed to move further toward the $46,000 resistance and started a 20-day decline.
According to the index’s developer website, the Fear and Greed index contains six sources: volatility, market momentum, social media, dominance, and trend. The seventh source, investigations, is currently on hold and not counted.
By aggregating various market and social data, this indicator accurately represents the current sentiment of the market, allowing traders to know what is going on in a trader’s mind.
The two most significant data sources are volatility and market momentum. This indicator leans towards extreme fear when Bitcoin volatility exceeds the 30- and 90-day averages during a bear market. It shows that traders are actively selling their positions, creating pressure and fear in the market.
BTC/USD 4-hour chart | Source: TradingView
At the time of writing, Bitcoin is trading at $39,331, with a 2% drop over the past 24 hours.
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