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Bitcoin ‘Fear and Greed Index’ reaches early pandemic levels of 2020
The crypto market has reached the fear level not seen since last April.
2 min read
Updated: April 26, 2021 at 7:30 am
Photo by Benjamin Wedemeyer on Unsplash
The โCrypto Fear and Greed Index,โ a collective metric that measures current sentiments on the cryptocurrency market, swiftly swung from โExtreme Greedโ (79 points) last week to โFearโ (31) today as most digital assets continue to wallow in the red zone.
Today's Cryptocurrency Fear And Greed Index: 31
Ranking: Fear#Crypto #Bitcoin #Ethereum
— Crypto Fear And Greed Bot (@FearAndGreedBot) April 25, 2021
The index takes into account various aspects such as volatility, the market’s momentum and trading volumes, social media sentiments, trends, and so on. The metric scales from 0 (maximum โFearโ) to 100 (ultimate โGreedโ).
Essentially, the โCrypto Fear and Greed Indexโ reflects the attitude of the majority of crypto enthusiasts. When it goes into the โFearโ territory, this means that prices of digital assets are likely going down and users are selling their crypto en masse.
Similarly, a high โGreedโ usually accompanies strong price rallies as demand for crypto outweighs supply, propelling its value up. While not conclusive in any sense, the index can nonetheless help traders to navigate the treacherous waters of cryptocurrency markets.
Bidenโs tax scare
The latest fear cycle on the crypto market was caused by the ongoing price decline across the board following rumors about potential tax law amendments in the U.S. As CryptoSlate reported, sources close to the Biden administration reported on Thursday that policymakers are planning to increase taxes for wealthy investors to as much as 43.5% for gains above $1 million.
This resulted in massive sell-offs across stocks and commodity markets, followed by digital assets as well. At press time, most cryptocurrencies are still trading in the red zone. However, the market has somewhat stabilized over the past couple of days as Bitcoin hovers around $50,000 (down from about $57,500 on Monday).
Sunday Survey:
Where will #Bitcoin bottom before we see the ATH again?
— Jimmy Song (์ก์ฌ์ค) (@jimmysong) April 25, 2021
Meanwhile, according to the โCrypto Fear and Greed Indexโ website, such levels of fear around 30 points have not been seen since April 2020โsoon after Bitcoin plunged to $5,000 from $10,000 amid the coronavirus outbreak.
Further fueling the panic, Scott Minerd, chief investment officer at Guggenheim Partners, said oั Friday that Bitcoin could see a 50% drop in the near term because it ran โtoo far, too fast.โ
โI think we could pull back to $20,000 to $30,000 on Bitcoin, which would be a 50% decline, but the interesting thing about Bitcoin is weโve seen these kinds of declines before,โ Minerd explained, adding that this would be โthe normal evolution in what is a longer-term bull market.โ
At the time of press, Bitcoin is ranked #1 by market cap and the BTC price is up 5.58% over the past 24 hours. BTC has a market capitalization of $984.68 billion with a 24-hour trading volume of $57.65 billion. Learn more ›
Bitcoin On-Chain Analysis
Market summary
At the time of press, the global cryptocurrency market is valued at at $1.97 trillion with a 24-hour volume of $159.85 billion. Bitcoin dominance is currently at 50.09%. Learn more ›
Author 
Reporter at CryptoSlate
Liam Frost is a freelance journalist and editor with over 15 years of experience working for various media outlets across the world.
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