A sudden sharp drop in the price of Bitcoin has triggered a domino effect for crypto assets across the board.
In less than an hour, BTC shot from $10,559 to $10,202, according to CoinMarketCap.
Of the top 10 coins, XRP is down the most, with a 12.35% drop to $0.2583 at time of publishing.
The overall market cap of all cryptocurrencies is now at $266 billion after floating around $278 billion for most of the day.
Crypto analyst Alex Krüger is highlighting a further drop in the crypto Fear & Greed Index from Alternative.me, which measures the overall sentiment of traders based on market volatility, surveys and social media. The needle is now in the extreme fear zone of 11, which indicates traders are extremely concerned that the price will continue to fall.
Are you afraid?
I am not.
(Fear & Greed index currently at the Dec/2018 lows)
— Alex Krüger (@krugermacro) August 14, 2019
The indicator has moved from greed to extreme fear in less than a week.
According to the creators of the index, when the needle moves this low, traders may be turning overly bearish on the market.
“The crypto market behavior is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in irrational reaction of seeing red numbers.
With our Fear and Greed Index, we try to save you from your own emotional overreactions.
There are two simple assumptions: Extreme fear can be a sign that investors are too worried. That could be a buying opportunity. When Investors are getting too greedy, that means the market is due for a correction.”