The Fear and Greed Index on the cryptocurrency market has dropped to 38, indicating growing investor caution. We analyze how such levels of the index have impacted the market in the past and what to expect in the future.
Fear and Greed Index: What's Happening?
The Fear and Greed Index by CoinMarketCap has dropped to 38, indicating increased caution but not panic. The last time the market was in this state, Bitcoin was trading around $60,000, with a total altcoin market cap of $900 billion.
Changes in Bitcoin and Altcoin Dynamics
By early February, the situation had changed: Bitcoin was nearing $100,000, and the altcoin market cap rose to $1.24 trillion, showing a 40% increase in the market.
What's Next for the Market?
Last time, market fear turned to greed within a month due to optimism around the US election. Now, the situation is less clear: there are no obvious external catalysts for a sharp rally. However, historically, any significant market downturn has been followed by subsequent rises.
Despite the ongoing caution, historical data shows that periods of fear rarely last long. Growth prospects may emerge, although the triggers for their onset are currently less apparent.
