Recently, the Bitcoin Fear and Greed Index fell by 22%, highlighting significant shifts in market sentiment.
Bitcoin Fear and Greed Index Decrease
According to renowned crypto analyst Axel Adler Jr., the 90-day simple moving average (SMA90D) of the index dropped by 22%. This indicates significant shifts in investment sentiment across the market. The analyst shared this information on social media, discussing the drop in the index.
Implications of the Index Decline
The analyst sees this 22% drop in the Fear and Greed Index as a sign of potential cooling down of overall market sentiment. Traders may have now digested recent macroeconomic uncertainties and volatility. If this trend continues with a further 10 to 15 percentage points reduction, it may stabilize the market.
Potential Accumulation Phase for Traders
Historically, times of extreme greed lead to corrections due to overvaluation and subsequent sell-offs. Conversely, when the Index decreases to neutral levels or fear, it can signify a healthier market reformation. This presents opportunities for traders to strategically accumulate. According to Axel Adler Jr., the 30-day simple moving average (SMA30D) points to signs of a local bottom, resembling previous corrections.
A further decline in the Fear and Greed Index may suggest a gradual recovery in the market, with potential stabilization in the coming weeks.
