Bitcoin recoups value amid ongoing “extreme fear”

Despite a significant market rally over the last month, the market is still in a state of extreme fear.

According to the Crypto Fear & Greed Index, the crypto market has been in a state of extreme fear for well over six weeks, as the crypto market continues its recovery after its sudden crash last month.

It’s the longest period of extreme fear since the tracker launched in February 2018.

What is the Crypto Fear & Greed Index?

Alternative.me’s Crypto Fear & Greed Index is an aggregate of a variety of indicators from different sources and represented as a number from 1 to 100. The index tracks market volatility (25%), market momentum (25%), social media sentiment (15%), surveys (15%), dominance (15%), and Google trends (10%). A value closer to zero indicates the market is in a state of fear, while a value closer to 100 indicates a state of greed.

Currently, the Crypto Fear & Greed Index sits at a value of 19, indicating the market sentiment is that of extreme fear.

Although this is one of the lowest numbers in recent years, it is still a marked improvement over the values seen both last week and last month. After the crypto market experienced a sudden crash in mid-March as a result of a dramatic market sell-off, the index dropped to a low of 8—its worst value since August 2019—before gradually recovering to reach 15 last week.

This slight improvement is likely owed to the recent rally in the crypto markets, which has seen most cryptocurrencies recover significant value after hitting a 2020-low in mid-March.

Despite falling to a low of $119.5 billion on March 13, the total crypto market cap has now returned to $206.9 billion—equivalent to a 72% climb from trough to peak. Much of this growth is owed to Bitcoin (BTC), which climbed from a low of $4,121 in mid-March, back to $7,152 today after gaining 73% in little more than a month.

Bitcoin is now up around 1.7% for the day and 6% for the month, but has recently begun losing ground to altcoins, seeing its market dominance eroded to just 63.3% in recent weeks.