The Fear & Greed Index Hits Extreme Lows - Should We Worry?

The popular Fear and Greed Index, published daily on alternative.me, is showing a value that we haven't seen since June 2022: extreme fear at a level of 10.

This index serves as a convenient barometer of market emotions. Its main purpose is to help you avoid falling prey to collective sentiment and instead, take advantage of it. There's a well-known principle that aligns with the index's approach: "Be fearful when others are greedy, and greedy when others are fearful." Extreme Fear can signal that most market participants are very worried – which often happens near market bottoms, when prices have already fallen significantly. Therefore, a very low index is frequently viewed as a potential buying opportunity, suggesting that panic selling may be coming to an end.

But right now, I don't see reasons for panic – at least not the kind of panic we witnessed in June 2022, when the Terra ecosystem collapsed and other crypto projects that had been playing with excessive risk began to crumble in its wake.

So what's happening now? Nothing special! Three months ago, when Bitcoin was trading around $80,000, there was euphoria! $80,000 is a lot, not a little! Despite the tempting signal from this index, I wouldn't buy Bitcoin for dollars right now.

In my opinion, today's figure shows how dramatically the subjective value of $80,000 has depreciated in the minds of crypto enthusiasts over these three months. Back then it seemed like a lot, and now it seems like very little.

But we deal in cryptocurrency, not dollars! So why should we care about them?

Keep calmly exchanging one cryptocurrency for another on rabbit.io without worrying about dollars. Then you'll have no reason for extreme fear. Everything remains stable with us.