The Fear and Greed Index has dropped to 12, and the phenomenon of extreme panic in the market is worth pondering 🤔
When the Fear and Greed Index plummets to 12, an extreme panic zone, we see an interesting differentiation: mainstream cryptocurrencies collectively rise, with ＄BTC up 1.3%, ＄ETH up 1.8%, while small-cap altcoins show a stark contrast.
This divergence is not commonly seen in my years of quantitative analysis. Typically, under extreme panic conditions, all risk assets decline simultaneously. However, currently, ＄DOGE leads with a 2.3% increase, and ＄XRP and ＄ETH perform strongly, indicating that funds are concentrating on more certain targets.
【Key Observation】 The rise and fall rankings show a clear stratification:
- The ultra-small-cap coin ＄NOM surged 45%, but its trading volume is only 12M, typical of a stock game
- Meanwhile, ＄FET, as the leader of the AI concept, shows a 7.6% increase with a trading volume of 22M, indicating institutional participation
This structural differentiation often signals that the market is about to choose a direction. Historical data shows that when the fear index falls below 15 and mainstream coins rise against the trend, it is often a precursor to bottom signals. Similar situations occurred in June 2022 and January 2023.
From a technical perspective, the strong performance of ＄DOGE around 0.09 is worth noting, combined with the Doge Strategy becoming a hot topic in the square, it may suggest that capital rotation in the meme sector is beginning.
Do you think this extreme panic is a good opportunity to buy the dip, or a continuation of the downtrend?
＄BTC ＄ETH ＄DOGE ＄FET ＄NOM
NFA, for reference only
＃BTC ＃crypto ＃cryptocurrency ＃Web3