Investors are nearly as fearful as they were during the bear-market despair of January, where Bitcoin was trading below $4,000, according to the “Crypto Fear & Greed Index.”

The index, scored 0-100, aims to provide a gauge of day-to-day sentiment in the market by measuring and aggregating data from volatility, volume, social media, surveys, and Bitcoin dominance. A score of 0 represents “extreme fear” and 100 indicates “extreme greed.”

The index ranged between 11 and 40 over the last few months. The score indicates that sentiment is only a fraction more optimistic, or greedy, than that of December 2018 to January 2019, when crypto market capitalization stood below $140 billion and trading volume hovered around $20 billion a day—respectively 60 and 70 percent less than the metrics of today.

Crypto Fear & Greed Index graph

Current market sentiment appears to have been growing steadily more fearful since late June, having reversed dramatically soon after Bitcoin began its sharp descent from $13,900 on June 26, when the index recorded an all-time-high of 95, indicating immense bullish sentiment.

Unsurprisingly, Bitcoin’s price-action tends to have a striking impact on intraday sentiment, with strong buy and sell walls coinciding with rapid shifts towards greed or fear. Bitcoin’s abrupt slide from $10,950 to $9,900 on Aug. 20 and 21, for example, took the index to the staggeringly low level of 5, the poorest sentiment recorded in its 19-month history. But, factors other than price-action could be contributing to the market’s recent shift towards fear.

Does Bakkt have the market spooked?

The launch of Bakkt’s highly anticipated Bitcoin futures contract, Sept. 23, coincided with a collapse in sentiment that saw the index slide to one of its lowest points on record (12/100) three days after the contract debuted with unexpectedly lackluster volume of 72 BTC—less than 2 percent of the cash-settled CME’s day-one volume in 2017.

Granted, this sharp loss of investor confidence occurred as Bitcoin dropped through the $10,000-mark—a figure seen widely by traders as a key psychological support level—and began a freefall that would see the coin shed more than 15 percent of its value by Sept. 24 and liquidate more than 600 million long contracts on Bitcoin derivatives exchange BitMEX.

Crypto Fear & Greed Index chart

The recent months-long downtrend seen in sentiment may suggest investors are overreacting to recent market breakdowns given the cryptocurrency market is in an inordinately stronger position than that of January and February.

Market capitalization key point chart

Trading volume and total capitalization are robust, arguably reflecting the steady increase of institutional and retail interest in Bitcoin as a store of value, hedge against economic uncertainty, and lucrative asset for speculation.

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