Bitcoin index plummets to extreme levels of fear
This valuation suggests that investors may see a potential buying opportunity, as extreme fears in the market often lead to recoveries, according to historical data from Alternative.me.
The current rating reflects the extreme concern among investors following a further drop of more than 20% in the price of Bitcoin this week.
Historically, price recoveries have often been driven by extreme fear. The Bitcoin Fear Greed Index is a very reliable signal that high levels of fear can signal undervaluation, which provides strategic investment opportunities, while extreme greed can signal overvaluation.
Historical patterns point to a possible market recovery
The cryptocurrency market has been very volatile. Earlier, the price of Bitcoin fell from over $60,000 to $49,000. Panic is growing in the market as further losses cannot be ruled out, especially during the trading session in New York.
A similar level of fear was seen in mid-April when the German government sold and distributed 50,000 BTC. The mountain of GOX refunds sent bitcoin down to $54,000, its first significant drop since March.
Given the current market conditions, some investors are drawing parallels between the current market conditions and the price movements of Bitcoin in March and June of this year. Because of this, given the double top structure of this bull market, some believe it's the same way.
