Cryptocurrency Market Once Again Enters State of ‘Extreme Fear’

The cryptocurrency markets are in a panic as Bitcoin (BTC) continues its freefall. It is trading at around $7,150 at the time of writing — a drop from $8,700 just a week ago. This descent has caused the rest of the cryptocurrency market to respond with panic and fear. In fact, according to the Crypto Fear & Greed Index, the sentiment right now is ‘extreme fear.’

With Bitcoin plummeting, the entire cryptocurrency market has gone right with it. The market capitalization of the entire cryptocurrency market has, as a result, dropped under $200B for the first time since May 2019. It is a painful drop that will likely further shake the hope of investors. Some are even saying that Bitcoin’s much-anticipated block-reward halving event in May 2020 is already ‘priced in.’

In August, fear was also at an all-time high. As BeInCrypto reported then, the Fear & Greed Index fell to a 244-day low. The level of fear had reached a level not seen since December 13, 2018, when Bitcoin (BTC) collapsed to $3,000. On August 22, this level dropped even lower to ‘5’ — which is the lowest recorded in a long time.

However, in hindsight, these moments of ‘extreme fear’ seemed to pass like any other. Now, we find ourselves again in the same territory with panic all around. However, Bitcoin has weathered this storm before.

It’s difficult to assess the reasons for this drop. With China dominating the cryptocurrency news cycle in the past month, the government’s position of “blockchain, not cryptocurrencies” may be the culprit. Either way, in the long run, Bitcoin’s fundamentals are still looking strong.

Images courtesy of Twitter, Shutterstock.

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