Investor sentiment in the crypto market has been on the decline since the bitcoin crash in June but had begun to see some uptick once the price began to stabilize. That is until another dip sent the price of bitcoin back below $20,000 and has once more triggered fear in investors. The Fear & Greed Index which had been recording some recovery in the sentiment has seen its reading plunge deep into the red once more.
Investors Are Still Extremely Scared
With the last week’s recovery above $22,000 had seen the Fear & Greed Index start to move out of the extreme fear territory. This was coming out of one of the worse months ever recorded in the history of the crypto market where extreme fear levels had touched as low as 9. Nonetheless, the recovery had done well to return some confidence in the market. But then Monday happened.
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When the market opened up into the new week, bitcoin had lost its footing above $22,000 already but it was still holding steady just below $21,000. It was expected that this would be where the digital asset made a stand against the bills. However, with low momentum going into the new week, it had quickly declined and that fall below $20,000 had taken the once-improving investor sentiment down with it.
As of the time of this writing, the Fear & Greed Index is sitting in extreme fear with a score of 16. It is down 6 points from the previous day’s score of 22 which had brought it close to leaving the extreme fear territory. This decline back into fear has triggered extreme wariness and drastically dropped the risk level of investors in the space.
Market in extreme fear| Source: alternative.me
It is nowhere near the lowest level that the index has been but with bitcoin and other cryptocurrencies still struggling to hold their prices, further decline is expected, leading to more negative sentiment.
Will Crypto Recover?
The crypto market is still a favorite for a lot of investors due to the wide potential of the space. However, the crypto market cap has lost another $50 billion off of its market cap as the bear market rages on. This has sparked speculations across the space regarding recovery and if there even is a recovery in the near future.
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A look at the charts shows that this is indeed a bear market and like any bear market, even though there may be slight recoveries here and there, the majority of movement is still towards the bottom. In this vein, there is not much recovery to be expected for the bear market and the $1 trillion market cap may be further away than expected.
Market cap sheds $50 billion | Source: Crypto Total Market Cap on TradingView.com
Additionally, with sell-offs across the space, it is hard for any digital asset to maintain a hold on any important level. It remains a seller’s market and that has given the bears full control of the market. So while there may be some recovery following the dip, it is likely a sharp decline will follow.
Featured image from Psychology Today, charts from TradingView.com
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