Data shows the Bitcoin fear and greed index has been pointing towards fear lately, something that might keep buyers from the Halloween Effect.
The Bitcoin Fear And Greed Index Points At Fear
The BTC fear and greed index is an indicator that measures the sentiment and emotions of the market based on various sources, and displays them on a numeric meter.
The metric utilizes a system with 0-100 as worths, where low worths suggest fear in the market, and greater ones reveal greed.
Extreme fear and greed occur when the indicator shows very low or very high values, respectively. Periods of fear generally occur when Bitcoin enters the red, while those of greed are seen throughout huge go up.
Here is how the fear and greed index has looked like recently, as per the latest Arcane Research report:
Last week the sign gradually began moving towards greed as the marketplace recuperated from the crash of 7 September. However, before the greed level could be hit, sentiment quickly turned into fear as BTC had yet another crash.
The listed below chart reveals the pattern in Bitcoin’s rate over the last month, highlighting the crashes that result in this state of fear.
Over the last few days, Bitcoin has had two big dips where the price went down to $40.5k in the first one, but all the way down to $39.6k in the second one. These have only fed into the fear sentiment.
Will These Fear Levels Hold Buyers Back From The Halloween Effect?
The Halloween Strategy is a trading approach that’s based upon the concept that stocks, Bitcoin and other possessions carry out the very best in between 31 October and 1 May.
Traders using the strategy generally recommend “to sell in May and go away,” until the next Halloween comes around.
Because of this concept, buyers generally see this time of the year as an ideal entry point into the marketplace. This is often called as the “Halloween Effect.”
The effect is a weird statistical anomaly as data over a period of a few years suggests the trading strategy does seem to produce better results.
Next month is the Halloween month, however will the impact bring in buyers to Bitcoin this time? As the fear and greed index shows fear among traders currently, investors might be hesitant to enter the market right now.
If the marketplace continues to reveal fear through the next month, then possibly the Halloween Effect won’t benefit BTC this year.
