After the Crypto Fear and Greed Index (CFGI) fell to very low levels and indicated a “extreme fear“In the crypto markets at the end of May, and for most of June, today the CFGI index is still in the zone of “fear“, but he has seen an improvement. On June 19, the CFGI index reached a low score of 6, which means a “extreme fear“, two months later, the CFGI index now shows a score of 33 or “fear“.
The CFGI rankings score shows that the crypto winter continues to keep investor sentiment in the “fear” zone.
As the cryptoeconomy climbed back above the $1 trillion mark, prices started falling again after the last rally. Following the implosion of the Terra blockchain, the cryptoeconomy lost a lot of value and extreme fear shook the community in June as well. The Cryptocurrency Fear and Greed Index (CFGI) site hosted on alternative.me fell sharply around this time, and on May 31, 2022, the CFGI ranking score was 16 out of 100, a “extreme fear“.
Every day, the CFGI ranking score analyzes “emotions and feelings from different sources and synthesizes them into a single number“. Alternative.me indicates that the value of 0 means “Extreme fear” while a value of 100 represents “Extreme greed“.” The site adds:
The cryptocurrency market is very emotional. People tend to be greedy when the market is up, which leads to FOMO (Fear of missing out). Also, people often sell their coins in an irrational reaction. There are two simple hypotheses: 1) Extreme fear may be a sign that investors are too worried. This may be a buying opportunity. 2) When investors get too greedy, it means the market is ready for a correction.
In mid-June, the CFGI ranking score declined further and slipped to a low score of 6 out of 100 on June 19, 2022. Cryptocurrency price data shows BTC was trading at 20,553 $1 unit on that day and the day before, June 18, BTC hit a 2022 low of $17,593. Today, the CFGI ranking score improved and the sentiment value rose from the position ” extreme fear “to the area” fear ” with a score of 33 out of 100.
Bitcoin managed to recoup some losses after market routs in May and June, and on August 14, 2022, the price peaked at $25,212 per unit. That same day, the CFGI ranking score jumped to 47, showing that sentiment was turning around. However, over the past 48 hours, Bitcoin has seen a significant drop in value from $23,593 to today’s low of $21,268. The CFGI ranking was unable to exceed the zone of “fear” and seems to be heading back into the score range of “extreme fear“.