Bitcoin sentiment back to greed as BTC breaks $28,900
Data shows sentiment in Bitcoin and the broader cryptocurrency market has turned back to greed as BTC’s price has breached $29,000.
Bitcoin Fear & Greed Index Now Pointing to “Greed”
The “Fear & Greed Index” is an indicator that tells us about the general sentiment among investors in Bitcoin and the broader cryptocurrency sector. The calculation uses a numerical scale that goes from 0-100 to represent this feeling.
All values on the index below 50 indicate that investors are scared right now, while those above this threshold indicate that the market is currently greedy. Although this boundary may in theory be clean, the area between the values 46 and 54 (that is, the boundary between the two sentiments) is considered to denote a neutral feeling.
There are also two “extreme” emotions, called extreme fear and extreme greed, which take place at values below 25 and above 75, respectively. These mentalities have had historical significance for the market, as cyclical bottoms have formed in the former region, while tops has taken shape in the latter.
For this reason, some investors believe that it is ideal to buy during extreme fear, while extreme greed provides the best selling opportunities. Adherents of this philosophy are called “contrarian traders.” Warren Buffet’s popular quote nicely encapsulates the same idea: “Be fearful when others are greedy, and greedy when others are fearful.”
Now, here’s what the fear and greed index currently looks like for Bitcoin and the general cryptocurrency market:
The sentiment among investors in the market right now | Source: Alternative
As you can see above, the Fear & Greed Index currently has a value of 56, which means that investors in the market as a whole are currently greedy. But yesterday the mentality in the sector was different, as holders shared a neutral sentiment.
The chart below shows how the indicator’s value has changed recently.
The value of the metric seems to have declined recently | Source: Alternative
From the chart, it is visible that the Bitcoin Fear & Greed Index had been stuck in the fear and extreme fear zones during the 2022 bear market, but with the rally this year, sentiment could return to neutral and greed values.
Between March 18 and April 19, the indicator had maintained relatively high greed values, but the recent plunge in price from over $30,000 to the low $27,000 levels naturally resulted in the market mentality also taking a hit.
In the days that followed, investors assumed a neutral sentiment (except for a brief spike to greed on the 23rd). However, with the price rising above $29,000 in the last 24 hours, the indicator has once again returned to greed values.
It is currently unclear whether the Bitcoin market can sustain this newfound momentum, or whether it is just a temporary increase. At the very least, general investor sentiment suggests they support the increase.
BTC price
At the time of writing, Bitcoin is trading around $29,900, up 1% in the past week.
BTC has sharply surged in the past day | Source: BTCUSD on TradingView
Featured image from André François McKenzie on Unsplash.com, Charts from TradingView.com, Alternative.me
