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After the Crypto Fear and Greed Index (CFGI) dropped to significant lows and pointed to “extreme fear” in crypto markets at the end of May, and throughout most of June, today the CFGI rating is still in the “fear” zone, but it has seen an improvement. On June 19, the CFGI rating tapped a low score of 6 which means “extreme fear,” and 61 days or two months later, the CFGI rating now shows a score of 33 or “fear.”
While the crypto economy has jumped back above the $1 trillion range, prices have started to drop again after the last rally. Following the Terra blockchain implosion, the crypto economy lost significant value and extreme fear shook the community into June as well. The Crypto Fear and Greed Index (CFGI) hosted on alternative.me dropped severely at the time, and on May 31, 2022, Bitcoin.com News reported the CFGI ranking score was 16 out of 100 or “extreme fear.”
Every day the CFGI ranking score analyzes “emotions and sentiments from different sources and crunch them into one simple number.” Alternative.me indicates that the value of 0 means “Extreme Fear” while a value of 100 represents “Extreme Greed.” The website adds:
The crypto market [behavior] is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in irrational reaction [to] seeing red numbers — There are two simple assumptions: 1) Extreme fear can be a sign that investors are too worried. That could be a buying opportunity. 2) When Investors are getting too greedy, that means the market is due for a correction
In mid-June, the CFGI ranking score sunk even lower and slipped to a low score of 6 out of 100 on June 19, 2022. Historical crypto price data shows that BTC was trading for $20,553 per unit that day and the day prior on June 18, BTC tapped a 2022 low at $17,593 per unit. Today, the CFGI ranking score has improved and the sentiment value has moved out of the “extreme fear” position into the “fear” zone with a score of 33 out of 100.
BTC managed to recoup some losses after the market routs in May and June, and on August 14, 2022, the price tapped $25,212 per unit. On that same day, the CFGI ranking score jumped to a 47 showing sentiment was turning. However, during the last 48 hours, BTC has dropped significantly in value, sliding from $23,593 per unit to today’s low of $21,268. The CFGI ranking has not been able to rise above the “fear” zone and seems to be heading back to the range of “extreme fear” scores.
