Crypto Market Sets 4-Month Record Without ‘Fear’ Sentiment

What has been the sentiment of the crypto market over time?

In the last six years from 2018 to 2024, the crypto market sentiment was fearful for 54.7% of the time, greedy 32.0% and neutral for the remaining 13.3%. During this period, the Fear and Greed Index averaged a score of 45, representing fear sentiment bordering on neutral. This suggests that crypto’s periods of euphoric sentiment are shorter than those of panic and negativity, or that expectations of a bullish market are more short-lived compared to bearish expectations. It is also worth noting that the fear and greed index has tracked sentiment for more bearish years than bullish years.

Most recently, the Crypto Fear and Greed Index recorded for the first time four consecutive months without any days in the ‘fear’ sentiment, from November 2023 to February 2024. It remains to be seen whether the crypto market will continue to ride bullish sentiments. experience leading up to the Bitcoin halving in April.

The fear and greed index previously came close to this record exactly three years ago from November 2020 to February 2021, when Bitcoin rose above $40,000 for the first time. At the time, the consecutive days of greed were broken by a single day of fear due to Bitcoin’s slight pullback before new highs.

Crypto Winter from 2018 to 2019

During the crypto bear market of 2018 to 2019, the Fear and Greed Index recorded the second and third highest number of days respectively in the ‘fear’ sentiment range.

In 2018, the crypto market experienced fear for an overwhelming 288 days out of 334 (86.2%), with an almost equal number of days in extreme fear (42.2%) and just fear (44.0%) . This occurred as the total crypto market capitalization hit a new high of $0.85 trillion on January 7th, then crashed due to the ICO bubble bursting and bled back to $0.13 trillion by the end of the year.

The crypto bear market continued well into 2019, with 216 out of 365 days registering fear on the index (59.2%). This was the year the Fear and Greed Index recorded its steepest overnight drop of 45 points, when the index dropped from a score of 61 (greed) on July 14 to 16 (extreme fear) the following day. Nevertheless, the sentiment of the crypto market was driven by a slight recovery in the middle of the year and recorded 121 days of greed (33.2%) in 2019, which was an improvement from the previous year.

Fear vs Greed in a Complete Crypto Market Cycle

2020 had a more balanced mix of sentiments at 46.2% fear and 39.1% greed, reflecting a consolidating and gradually recovering market. Especially in the second half of the year, the crypto market experienced extreme greed for 80 days (21.9% of the year) and 0 days of extreme fear, in the midst of DeFi summer.

In the 2021 bull run, the crypto market experienced the most greed among all years tracked so far, with 199 days in greed out of 365 days (54.5%). The Fear and Greed index also recorded its highest overnight rise of 40 points, from a score of 38 (fear) on March 1 to 78 (extreme greed) the following day. During this year, the total crypto market capitalization rose from $0.78 trillion to $2.31 trillion, while Bitcoin broke to new highs, peaking above $69,000.

The crypto market was particularly euphoric in the first quarter of 2021, experiencing greed 96.7% of the time. However, sentiment became more mixed in subsequent quarters, likely driven by pullbacks amid volatile market conditions.

Crypto sentiment in 2022 was a stark contrast, as the market was scared for almost the entire year, or 343 out of 365 days (94.0%). Extreme fear accounted for 207 days, more than the 136 days recorded only by fear. The crypto market experienced only 3 days of greed and none for extreme greed despite NFTs climbing to new highs in native crypto terms.

Even in the first quarter when crypto ads featured prominently in the US Super Bowl, the crypto market already experienced fear 83.3% of the time. It increased each quarter: Fear accounted for 93.4% of the second quarter when Terra Luna crashed, then climbed to 98.9% in the third quarter amid more contagion and worsening overall market conditions, and finally reached a high of 100.0% in the fourth quarter when FTX collapsed.

Despite the continued crypto bear market in 2023, sentiments seemed to stabilize with neutral accounting for 137 days (37.5%), greed registering at 165 days (45.2%), and significantly less fear at 63 days (17.3%). Notably, 2023 had only 3 days of extreme fear in the first quarter and no days of extreme greed. This suggests that the consolidating crypto market has led to lighter sentiments recorded on the Fear and Greed Index.

Crypto Fear and Greed Index by Year

The percentage share of days that the crypto market experienced fear, neutral and greed sentiments annually from 2018 to 2024, as of March 5, 2024:

Year
Fear
Neutral
Greed

2018 86.2% 6.9% 6.9% 2019 59.2% 7.7% 33.2% 2020 46.2% 14.8% 39.1% 2021 38.1% 7.4% 54.5% 2022 82.72 94.3% 3022 94.5% 45.2% 2024 0.0% 12.3% 87.7%

Note that 2018 data was only available as of February 1.

Methodology

The study examined crypto market sentiment over the years based on Alternative.me’s Crypto Fear & Greed Index, from February 1, 2018 to March 5, 2024. The ‘extreme fear’ sentiment is represented by a score between 0 to 25, ‘fear’ is 26 to 46, ‘neutral’ is 47 to 54, ‘greed’ is 55 to 75, and ‘extreme greed’ is 76 to 100. Bitcoin and total crypto market cap data are taken from CoinGecko.

This study is for illustrative and informational purposes only, and is not financial advice. Always do your own research and be careful when putting your money into any crypto or financial asset.

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