Recent data indicates that Bitcoin sentiment has been hovering at the brink of extreme greed, yet investors appear hesitant to fully engage with the excitement.
Current Status of the Bitcoin Fear & Greed Index: ‘Greed’
The “Fear & Greed Index” is an indicator devised by Alternative that reflects the overall sentiment among Bitcoin investors and those involved in the broader cryptocurrency market.
This index quantifies sentiment on a scale from zero to one hundred, taking into account five factors: volatility, trading volume, social media sentiment, market cap dominance, and Google Trends.
A reading above 53 indicates a greed sentiment among investors, whereas a figure below 47 points to fear within the market. The range in between these two thresholds reflects a neutral outlook.
Currently, here’s what the Bitcoin Fear & Greed Index looks like:
The index currently registers a value of 70 | Source: Alternative
As illustrated above, the most recent measurement of the Fear & Greed Index is 70, suggesting that traders collectively exhibit a significant level of greed. This isn’t an isolated incident; the market has been in this state for the past week.
The chart below depicts the index’s trend over the past year.
The recent spike in the index value is notable | Source: Alternative
The graph indicates that the index had recently dipped into fear territory earlier this month due to the downward price trends. However, trader optimism has rebounded significantly with the recent rally.
During this latest phase of greed, the index reached a high of 73, approaching the threshold of extreme greed, defined at 75 and above.
Historically, the index has typically crossed into this territory during periods of market euphoria, which usually leads to price peaks.
Conversely, there is a similar region on the fear side known as extreme fear (25 and below), where extreme market despair has often resulted in price bottoms.
In recent days, the Bitcoin Fear & Greed Index has maintained a position just above the extreme greed level, likely due to a recent pullback in the rally.
Investors’ current reluctance to fully leap onto the hype bandwagon may bode well for the sustainability of this rally, indicating that excessive greed has not yet become a hindrance.
BTC Price Update
Bitcoin’s price has decreased to $67,300 after briefly surpassing $69,000 a couple of days ago.
The recent price of the cryptocurrency has dropped | Source: BTCUSDT on TradingView
Featured image from Dall-E, Alternative.me, chart from TradingView.com