Investor sentiment in the cryptocurrency markets continues to be weak. According to Alternative.me data, the Crypto Fear and Greed Index fell back to 5 as of February 23rd. This is the second time the index has reached such a low value since February 12th, and it has also dropped below the previous day’s high of 9.
On an index measured between 0 and 100, a level of 5 indicates the “extreme fear” zone. Based on the current situation, market sentiment remained consistently in the extreme fear range throughout February. This suggests a significant decrease in investor risk appetite and continued selling pressure.
The index measures overall market psychology by combining various data points such as volatility, trading volume, market momentum, social media trends, and Bitcoin dominance. Increased price fluctuations and macroeconomic uncertainties, particularly in recent weeks, have put pressure on sentiment.
Analysts emphasize that while extreme levels of fear have historically signaled bottoming out, they should not be considered a buy signal on their own. They state that a sustained market recovery requires increased trading volumes and clearer signs of improvement on the macroeconomic front.
Current data suggests that a cautious outlook in the crypto market may continue in the short term.
*This is not investment advice.
