Crypto market fear and greed index fell to its lowest point in two years

The last time the indicator of 8/100, meaning extreme fear, was observed on March 28, 2020

17.05.2022 - 13:15

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What’s new? As of May 17, the Fear & Greed Index (F&G) of the cryptocurrency market has fallen to its lowest point since March 28, 2020. The sentiment indicator has reached 8/100 (extreme fear), indicating extreme investor concern. The market unrest began after the TerraUSD (UST) stablecoin rate collapsed and Tether (USDT) temporarily lost its peg to the US dollar. On May 12, the bitcoin rate fell as low as $26 700. As of May 17, 16:00 Moscow time, BTC is trading at $30 522 (according to Binance).

Source: Alternative.me

Crypto Fear & Greed Index is an indicator that measures the general mood of investors in the market. It is measured on a numerical scale from 0 to 100, where zero means “extreme fear” and 100 means “extreme greed.” Volatility, market volume, capitalization of the first cryptocurrency, trends, as well as social media sentiment are analyzed to determine the index.

When and why did the index fall to a low? On March 28, 2020, the Fear & Greed Index also hit 8/100. This came two weeks after the collapse of the crypto market caused by the coronavirus. Then the bitcoin exchange rate was dropping to $3782.

What happened before? The analysts at Glassnode reported that crypto investors started to get rid of USDT and DAI stablecoins after the collapse of the UST rate. The company said in its weekly report that total volumes of USDT and DAI in circulation fell by 6,75% and 24,4% respectively.

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