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 Concern and Greed Index pointing left for a month straight. What does this imply? The place can we go from right here? That’s what we’re right here to discover.
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However first, let’s speak concerning the Concern and Greed Index. One of many many Bitcoin indicators, it measures the market’s common sentiment in the mean time. Zero is excessive Concern. 100 is excessive Greed. And the indicator oscillates between these two at any given time. It’s been mentioned that the crypto market could be very emotional. The Concern and Greed Index is there to maintain traders from making irrational choices based mostly on sentiment alone.
Concern And Greed Index reveals Excessive Concern | Supply: Arcane Analysis’s The Weekly Replace
What’s The Concern And Greed Index Saying Now?
In accordance with Arcane Analysis’s The Weekly Replace, concern has settled in:
“The Concern and Greed Index has now signaled “Concern” or “Excessive Concern” for nearly one month straight. The final time we noticed such a chronic fearful market sentiment was in the beginning of the summer time 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 adverse in the mean 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 to this point in December, seeing a adverse return of -18% after a comparatively flat second week of buying and selling this month.” Then again, “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 Could nineteenth and Sep thirteenth. It appears that evidently the 40% threshold is a tough space for alts to maintain”
BTC value 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 Concern & Greed 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 pattern. The takeaway right here is that this, so long as Bitcoin closes the week under the cycle assist band, we shouldn’t count on any main breakout in value to happen.”
Each canine has its day, although. Every week in the past, analyzing a really comparable market sentiment, NewsBTC knowledgeable you:
“A “Concern and Greed” Index on Excessive Concern ranges, in response to sure analysts, has traditionally preceded crypto market native bottoms. Nonetheless, 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 do not forget that solely two months in the past, we had been in an identical state of affairs and the sentiment did an entire 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 underneath 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 state of affairs like this there’s just one factor lets say… hodl the road!
Featured Picture: PublicDomainPictures on Pixabay| Charts by TradingView