Sentiment sinks to 4-month low, is it time to simply accept crypto winter is right here?

by Cryptospacey

The Concern and Greed Index fell to 11 on Might 9 after the newest crypto market sell-off, representing a 7-point drop from Might 8 and inserting sentiment firmly inside ‘excessive worry’ territory.

Crypto Fear and Greed Index

The Concern and Greed Index is compiled utilizing 5 varieties of knowledge sources with various levels of weighting. Volatility and market momentum/quantity make up essentially the most vital weightings, at 25% every. However different knowledge sources embody social media, surveys, Bitcoin (BTC) dominance, and tendencies.

The market sentiment displays the general angle or feeling in the direction of a selected asset or monetary market. As sentiment influences technical indicators, merchants and analysts can use it to gauge short-term value actions.

With the vast majority of 2022 spent transferring between worry and excessive worry, is it now time to simply accept the bear market is right here?

Brace for a downturn

January 23, 2022, was the final time crypto market sentiment was this low. This era was characterised by a common stoop in macroeconomic sentiment purchased on by a slide in international shares.

4 months on, and the narrative stays the identical, if not worse, on condition that the Fed has adopted by way of with speak of cooling the economic system by elevating charges twice this 12 months. The primary on March 16 and the final on Might 4.

Chart of crypto sentiment over a year

With no signal of inflation coming underneath management, the Fed will possible proceed to boost charges, the upshot being much less liquidity available in the market. Extra so for dangerous belongings, together with cryptocurrencies.

Is crypto winter right here already?

Crypto winter refers to a protracted interval of falling costs. The earlier bear market started in early 2018, following Bitcoin’s spike to $20,000. After an 85% drop to backside at $3,100, the bear market resulted in December 2020 after re-reaching $20,000.

The market chief, Bitcoin, has been trending downwards since hitting its all-time excessive of $69,000 in early November 2021. The Crypto Lark factors out Bitcoin has closed its sixth weekly consecutive purple candle, which has not occurred since 2014.

Bitcoin daily chart
Supply: BTCUSDT on

Value volatility has hinted on the chance that crypto winter is right here already. And virtually midway into 2022, it’s more and more troublesome to construct a bull case.

In a current tweet, Rekt Capital, though removed from calling this downturn a bear market, implied that additional drops could be on the playing cards.

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