The Crypto Fear & Greed Index, a key market sentiment indicator compiled by data provider Alternative.me, has risen 12 points to a value of 22 in its latest reading. Despite this increase, the index remains firmly entrenched in the "Extreme Fear" category, a zone it entered on January 30th and has now occupied for 35 consecutive days.
The index, which measures overall investor sentiment in the cryptocurrency market on a scale from 0 (extreme fear) to 100 (extreme greed), is calculated using a weighted formula. This formula incorporates market volatility (25%), trading volume (25%), social media engagement (15%), investor surveys (15%), Bitcoin's market capitalization dominance (10%), and Google search volume (10%).
This persistent extreme fear sentiment comes despite a notable price recovery for Bitcoin, which recently rallied toward $74,000 before settling around $72,300. Historically, the extreme fear zone has been where major market bottoms have tended to form, as the indicator often exhibits an inverse relationship with market trajectory. The index hit a notably low value of 5 in February, a level considered extremely rare historically.
Analysts note that for the index to climb back into the standard "Fear" or "Neutral" zones, market stability needs to strengthen and price movements must become more balanced. The current streak of extreme fear suggests investors remain highly cautious, with market uncertainties keeping overall risk perception elevated.
