Yesterday, the Bitcoin Fear and Greed Index showed the lowest value in more than a year, pointing to a fear level of 26. The last time such pessimistic sentiment was recorded was in March and April 2020, during the market crash caused by the first wave of the COVID-19 pandemic.
Contrary to bearish sentiment, cryptocurrency analyst PlanB released an updated chart of its stock flow model yesterday. According to him, the bull market has reached the middle of its career Y, after a period of consolidation, you will see another raise of a 5x.
Lowest Fear and Greed Index for over a year
Yesterday, the Fear and Greed Index, a popular indicator of Bitcoin sentiment, gave its lowest reading in more than a year. The value of the indicator reached 26, which is interpreted as a strong indicator of fear in the market.
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The last time the index registered such low values was in the period from March to April 2020 (orange rectangle in the image below), at the beginning of the COVID-19 pandemic. Its direct result was the crisis in most financial markets, including the cryptocurrency space. In that crisis, Bitcoin reached a low of $ 3,782.
To be precise, April 29 was the last time the value of 26 was recorded on the Fear and Greed Index, and BTC was trading at $ 7,600.
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Today, the price of Bitcoin is around $ 50,000, but, according to our indicator, the feeling is the same.
On the one hand, it can be interpreted as a radical change in the sentiment of cryptocurrency market participants, which could indicate a major change in the market trend. On the other hand, the Fear and Greed Index has often served as an inverted signal in accordance with Warren Buffett’s popular motto, “Be afraid when others are greedy and greedy when others are afraid.” Therefore, if the indicator shows a low value could mean that it is a good time to make an imminent purchase.
PlanB dispels fear, uncertainty and doubt (FUD)
An interesting response to the growing bearish sentiment is yesterday’s tweet from PlanB, one of the best-known Bitcoin analysts. Posted an updated S2FX chart, whose structure is more similar to the 2013 cycle than the 2017 cycle.
According to PlanB, the driving force behind Bitcoin, generated by its four-year halving cycles, has made a profit of 5x in the last six months. The analyst emphasizes that this happened despite the ubiquitous FUD (fear, uncertainty and doubt), examples of which he lists:
In addition, he emphasizes that both his stock / flow model and the chain data indicate that we are in the middle of the current cycle. Recently, BeInCrypto explained that many key indicators of the chain analysis have experienced a reset.
Finally, summarize that it is very likely that in the next 6 months we will see more profits of 5x.
The current polarization of market sentiment is very interesting. Bitcoin price action and some technical indicators still point to an ongoing fix. Some, like Pi Cycle Top, indicated that the top of the current cycle had already been reached.
However, looking at the history of Bitcoin cycles, on-chain analysis, and the stock / flow model based on halving dynamics, there are strong arguments that the bull run will continue, and prices will rise parabolically.
The post The Lowest Fear and Greed Index since the COVID-19 crisis was first seen on BeInCrypto.