Negative sentiment in the crypto market has been increasing in recent months. After all, the main digital assets on the market such as BTC and ETH have fallen to their lowest value for the year.
So, as the bulls have struggled to lift the value of crypto assets, this has resulted in some of the lowest scale readings that the Fear and Greed Index has released in recent times.
As with any declining market, investor sentiment has taken a turn for the worse. Data shows, for example, that the market is now in extreme fear. This means that investors are wary of investing in cryptocurrencies.
Currently, the Fear and Greed index displays a score of ten. This is one of the lowest levels in the last six months.
The last time the index was this low was in January. That month, the market was still recovering from the December 4th crash.
Negative sentiment deepens
This negative sentiment continues to strengthen even with BTC’s recent rally. The biggest cryptocurrency on the market is back trading above $30,000 and ETH is pushing up to $2,000.
According to the analyst known as “Best Owie”, sentiment is not tracking market movement as strongly as it used to, and is clinging to where investors believe the market is going.
“It is debatable whether this recovery will last. This is because the bears are increasingly having a stronger grip on the market compared to the bulls. This makes the market prone to a sudden drop and investor sentiment is on the bear side,” Owie said.
Furthermore, he pointed out that when looking at BTC indicators, the digital currency continues to trade below the 50-day moving average.
According to him, for BTC, adequate support is only present at the $28,108 level. This means that any decline will send BTC back to before levels.
“To maintain a recovery trend, a large influx of resources into the market will be required. Even at oversold levels, many digital currencies remain prone to further declines unless buyers can increase their activity enough to break a downtrend.”
