19, 5, $70,103: The Fear Index fell back to 19 today, and Bitcoin is back below $70,000—when it dropped to its all-time low of 5 in February this year, Bitcoin was also around this price.
#Crypto and US stocks are both falling. What will drive the next rebound? The Fear and Greed Index on Square is at 19 today: extreme fear. $BTC is now at $69,115, with a 24-hour low of $67,510. It just dipped below $70,000 this morning and rebounded by about $1,600, but it’s still languishing below $70,000.
First, look in the mirror of this February. The index hit its all-time low of 5 twice that month. On February 7, Bitcoin closed at $70,103. Those who thought that was the bottom were later met with $57,809 on July 1—a further 17.5% drop. Extreme fear can persist for weeks at a time. In 2022, it stayed in extreme-fear territory for 74 consecutive days, while prices kept falling.
Now look in the mirror of last October. On October 10, the index was still at 64; the next day, it plunged to 27, and more than $19 billion in positions were liquidated across the market in a single day. Bitcoin had set an all-time high of $126,200 just three days earlier. That wasn’t the bottom—it was the start of this entire slide from the peak.
So here’s my take: the Fear Index is a sentiment thermometer, not a buy-the-dip signal. It only tells you how afraid the market is; it doesn’t tell you when that fear will end. An index bottom and a price bottom are two different things. The next rebound won’t be driven by the index itself, but by three things: whether US spot Bitcoin ETFs can reverse their net outflows after five consecutive trading days of roughly $1.44 billion in outflows; whether Bitcoin can reclaim $70,000; and whether Nvidia’s Q3 earnings report on November 17 delivers. If two of the three happen, then I’ll believe this was a fakeout. If none do, I’ll treat this rebound as a chance for long-position holders to break even and get out.
When was the last time you bought the dip during extreme fear? Did you catch the bottom, or buy halfway down?
—Bao Bao
#Crypto and US stocks are both falling. What will drive the next rebound? The Fear and Greed Index on Square is at 19 today: extreme fear. $BTC is now at $69,115, with a 24-hour low of $67,510. It just dipped below $70,000 this morning and rebounded by about $1,600, but it’s still languishing below $70,000.
First, look in the mirror of this February. The index hit its all-time low of 5 twice that month. On February 7, Bitcoin closed at $70,103. Those who thought that was the bottom were later met with $57,809 on July 1—a further 17.5% drop. Extreme fear can persist for weeks at a time. In 2022, it stayed in extreme-fear territory for 74 consecutive days, while prices kept falling.
Now look in the mirror of last October. On October 10, the index was still at 64; the next day, it plunged to 27, and more than $19 billion in positions were liquidated across the market in a single day. Bitcoin had set an all-time high of $126,200 just three days earlier. That wasn’t the bottom—it was the start of this entire slide from the peak.
So here’s my take: the Fear Index is a sentiment thermometer, not a buy-the-dip signal. It only tells you how afraid the market is; it doesn’t tell you when that fear will end. An index bottom and a price bottom are two different things. The next rebound won’t be driven by the index itself, but by three things: whether US spot Bitcoin ETFs can reverse their net outflows after five consecutive trading days of roughly $1.44 billion in outflows; whether Bitcoin can reclaim $70,000; and whether Nvidia’s Q3 earnings report on November 17 delivers. If two of the three happen, then I’ll believe this was a fakeout. If none do, I’ll treat this rebound as a chance for long-position holders to break even and get out.
When was the last time you bought the dip during extreme fear? Did you catch the bottom, or buy halfway down?
—Bao Bao
