Fear spreads among investors as Bitcoin struggles to recover

Fear spreads among investors as Bitcoin struggles to recover

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Answer Fear spreads among investors as Bitcoin struggles to recover

According to the Fear and Greed Index (Cryptography of fear and greed), the cryptocurrency market sentiment remains in the area of ​​fear after yesterday it was in the area of ​​extreme fear.

The Fear and Greed Index, as it is well known, takes into account several factors, such as market volatility, social media posts and trading volume, in order to determine how investors and traders feel about the current market situation.

The indicator enters the fear zone when it drops below 50.

Recently, he printed a score of 25, indicating “extreme fear”.

The indicator measures the sentiment of cryptocurrency traders on a daily basis.

Read:Is bitcoin a scam?

Fear still hangs over the hearts of investors in the crypto market:

Market sentiment has seen a major shift in just two weeks.

In late March, the index signaled feelings of “greed” for the first time in four months after cryptocurrency Bitcoin reached a new high in 2022 at $48,234.

Recovery ended quickly.

Earlier this week, bitcoin fell below $40,000 for the first time since March 16 amid concerns that the US Federal Reserve has adopted tougher monetary policy to deal with high inflation.

There is a group of contradictory traders and investors that tend to buy fear, challenging the overall market sentiment.

According to the advice of legendary investor Warren Buffett who once told that one must be greedy when others are afraid.

However, the mentality of buying low, selling high does not always work as planned in cryptocurrencies.

Buying on the dip often backfires as traders may simply end up with the knife falling.

No matter how low bitcoin is, one must keep in mind that it can always drop in a maximum pain scenario.

There have been several occasions when the index fell below 10 after a brutal sell-off triggered by fear and panic.

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