Bitcoin Investors Remain Greedy, But Why Are Prices Falling?
Bull market, finance and business concept
Bitcoin and other cryptocurrencies in the market have seen incredible price action lately. This comes despite the Fear & Greed Index showing that investors are still very greedy when it comes to digital assets. So why are prices still falling?
Investors await the release of CPI data
The latest iteration of the US Consumer Price Index (CPI) is scheduled to be released later this week, and crypto investors appear to be waiting for this before taking any action. The release will take place on May 10, 2023, and will show whether inflation in the country increased, decreased or remained the same, which could have a major impact on financial markets.
If inflation were to come higher, the Fed could take back a hawkish stance that would be brutal for risk assets like Bitcoin. However, if inflation figures were to come in much lower, a dovish stance from the Fed is expected, thus giving investors plenty of room to take on more risk.
Finally, if inflation were to remain the same, it is safe to assume that there would not be much of an impact on the financial market and the crypto market by extension. Although what it can do is maintain current market sentiment and if the bulls continue to prevail, momentum is likely to build for an uptrend versus a downtrend.
The Bitcoin Fear and Greed Index remains strong
The Bitcoin Fear & Greed Index still points to the strong bullish sentiment among investors in the market as it continues to trend in “greed”. This shows that crypto investors are still looking towards more upside, but the decline in the market shows a degree of caution despite this bullishness.
Interestingly, the market also finished last week strongly around this level, but today’s score of 60 on the index points to a decrease in greed. Nevertheless, it remains at a reasonably high level compared to 2022’s figure.
Fear & Greed Index remains in greed | Source: alternative.me
A reversal in the market trend from here could send the fear and greed index back in the direction of “extreme greed” again. But while this level of greed is welcome in the market due to rising prices, it has been known to mark the top of market rallies, leaving a bittersweet aftertaste in investors’ mouths each time.
The price of Bitcoin is currently trading below $28,000 after crossing $31,000 last month. It sees loss of 2.97% on the daily chart bringing its market cap back to $541 billion.
