Despite the price of Bitcoin hitting an ATH of $68,000 in November 2021, the current price of BTC has plummeted to around $19,000, echoing a sentiment of fear among investors.
The Bitcoin Fear and Greed index is also reflecting a similar assumption with the current index statistics pointing to 23. This denotes "Extreme Fear" among the masses concerning BTC prices.
So, what's fueling fear concerning Bitcoin among the masses?
What Does Bitcoin Fear and Greed Index Mean?
A Bitcoin Fear and Greed index, in general, is an online evaluation tool that assesses the overall emotional sentiments of investors concerning BTC prices.
The index maps the broad market sentiment ranging from 1-100. The lowest ranges denote extreme fear (bearish). A higher number usually indicates higher greed (bullish) factor, indicating that the market may soon require a correction to promote equilibrium in the range.
- Read more: Binance Chain hacked for 2 million BNB
The index uses multiple market factors to determine an accurate range of fear and greed concerning BTC among investors.
Nearly 25% of the weight is given to the market volatility factor along with another 25% weight to market momentum. Other indicators include social media, data from Google Trends, and coin dominance.
Why is the Bitcoin Fear and Greed Index At Its Highest Since July 2021?
2021 was quite an eventful year for Bitcoin. BTC had managed to rise high on global financial indexes while encountering a few upheavals down the line.
Since hitting its most recent ATH of $68,700 in October 2021, Bitcoin dropped over 40% to the $40,000 range for a few months. As of October 2022, BTC has fallen lower and is trading around $19,000.
Several factors have affected the prices of Bitcoin since July, 2021.
The latest factor was the release of the Federal Reserve Board's minutes from its December meeting. These revealed the prospect of an interest rate hike soon. This is also paired with concerns over the political unrest in Kazakhstan, which saw the country's internet shutdown bring Bitcoin's hashrate down, given the country was responsible for 18% of the hashrate.
Paired with the recent drops caused by fears over the Omicron variant of Covid-19, and the uncertainty towards Evergrande, and you can see why the Fear and Greed Index is at a low.
For more articles like this, take a look at our Planet Crypto page.