In March 2020, as the COVID-19 pandemic hit, the Fear and Greed Index dropped to near 10 (Extreme Fear).

This was also the time when Bitcoin price dropped sharply below $4,000, creating a buying opportunity for investors before it grew strongly in the following months.

In 2021, the index consistently reached levels above 75 (Extreme Greed) before Bitcoin reached its all-time high of nearly $69,000 in November 2021. This is often a warning sign that the market may correct when euphoria peaks. In late 2021, the index dropped sharply from Greed to Fear as Bitcoin prices plunged, indicating a clear shift in market sentiment as investors retreated from risk. Following the collapse of the FTX exchange in November 2022, the index dropped sharply, indicating extreme investor concern.

In January 2023, the index was at a low of 26 when Bitcoin was trading around $16,500. However, a rapid recovery occurred, with Bitcoin rising to $22,000 by the end of the month, indicating a shift in market sentiment from fear to positive expectations.

Volatility after Bitcoin ETF (end of 2023):

In October 2023, the index rose to “extreme greed” (76 points) after the US approved a spot Bitcoin ETF. However, just a few days later, the index fell to “neutral” (52 points), when the price of Bitcoin fell from $49,000 to $41,500. This shows that caution returned as investors took profits due to the instability of the new ETF.

Concerns from selling pressure (mid-2023):

In July 2023, the index fell to its lowest level since the beginning of the year (27 points), due to concerns about selling pressure from the German government and the refund from Mt. Gox.

These factors have caused the price of Bitcoin to fall from $63,000 to around $53,570. Currently, the fear index is sky high, as history has shown that when the greed index is high, Bitcoin has a downward price correction and with the fear index being so high (at times reaching 90, close to 95 in 2019), Bitcoin will definitely be adjusted downward.

p/s: Be greedy when others are fearful and fearful when others are greedy.