As the price of bitcoin continues to lose value, the popular Fear and Greed Index has fallen back into extreme fear territory. The index has not been in such bad shape since late January, when the price of the asset fell to $33,000.
Sentiment around the major cryptocurrency has been bearish since late March, with BTC at around $50,000 at the time. In April, the major cryptocurrency fell more than $10,000 and closed the month below the $40,000 level.
So far in May, the downward trend continues, as BTC has lost several thousand dollars in the past few days, and the exchange rate has dropped to the $34,000 range.
As you would expect, this sharp price collapse has instilled pessimism in the market. Studying community publications in social networks, volatility, trading volume etc., the Bitcoin Fear Index was calculated (from 0 (extreme fear) to 100 (extreme greed).
It has been in fear territory since mid-April, but recent price spikes have taken it to an extreme fear of 18 points.
Usually retail investors react more emotionally to downturns and get rid of their assets during sell-offs, but this time the CryptoQuant data suggests otherwise.
A recent study by the analytical resource shows that the number of big players and whales who sent 10 to 10,000 BTC to exchanges exceeded the number of small investors selling from 0.01 BTC to 10 BTC.
Experts believe that whales may have “an open position in the stock market, and taking profits in cryptocurrency may mean reducing risky assets to protect their equity positions.”