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Question #361

How does extreme fear indicated by the Fear & Greed Index influence potential rally opportunities in Bitcoin?

Category: General
Extreme fear triggers institutional selling but never signals buying opportunities
Extreme fear directly causes sustained market declines without any reversal
Extreme fear often precedes bargain buying and potential Bitcoin rallies
Extreme fear encourages long-term investor confidence and attracts new buyers

Why is this the correct answer?

When the Fear & Greed Index falls into extreme fear territory, it reflects mass panic selling and low investor confidence. Historically, such conditions have marked market bottoms, as value buyers step in to purchase Bitcoin at discounted prices. For beginners, this means that extreme fear can signal a favorable entry point rather than continued losses.

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