The Bitcoin Fear & Greed Index shows that the sentiment around the asset has cooled off a bit recently, something that could pave the way for a rebound.
Bitcoin Fear & Greed Index Has Gone Through Some Decline Recently
“Fear & Greed IndexIt is a graphical indicator that was created by Alternative What does this tell us about investor sentiment in Bitcoin and other cryptocurrency markets?
This index measures the mentality of traders by taking into account five factors, including volatility, trading volume and social media sentiment. It also takes market cap dominance as well as Google Trends.
For this metric, a scale of zero to one hundred is used. Scores of less than 46 indicate fear, while scores of 54 or more suggest greed.
This neutral territory (47-53) is the area between them. In addition to the three extreme emotions, there are also called “extreme greed” You can also find out more about the following: “extreme fear.”
Extreme fear and greed occur below 25, while values over 75 are a source of extreme greed. These two emotions have historically been very relevant to BTC’s growth.
The market tends to reach its highest point when investors hold the positive sentiment. Conversely, the lowest points are more likely to be reached when it is in the negative zone.
At present, the traders are holding a mentality of extreme greed, as the latest data of the Bitcoin Fear & Greed Index shows.
It looks like the current value of the metric unit is 77 | Source: Alternative
As can be seen, this indicator has a value of 77 at the moment, which indicates that, while extreme greed is present, it still isn’t justified. As the graph below shows, this represents a change in recent years.
Source:| Source: Alternative
From the graph, it’s visible that the Bitcoin Fear & Greed Index has mostly stayed deep inside the extreme greed region recently. The indicator reached 88 on the 14th, while the BTC rate hit its all-time record high at $73,800.
The asset value has fallen since this peak. plunged, and it appears that alongside it, so has the sentiment among the traders. As we have already mentioned, the likelihood of a top occurring is higher when traders share a mindset that is driven by extreme greed.
Perhaps this is why it happened at the time that it did. Another top this month, the one that took place on the 5th, also coincided with high values in the Fear & Greed Index (a peak of 90 this time).
After the initial peak in crypto and its subsequent plummet, the asset hit bottom when the indicator briefly left the region of extreme greed.
As the Bitcoin Fear & Greed Index is once again looking to dip outside this territory, it’s possible that a bottom may be near for the price this time as well. Now it remains to see if sentiments will moderate enough over the next few days to allow the price to temporarily leave this extreme territory.
BTC price
Bitcoin fell to $64,500 over the weekend but has recovered in the last day, and is now at $68,000.
Source| Source: BTCUSD on TradingView
Featured image from Yiğit Ali Atasoy on Unsplash.com, Alternative.me, chart from TradingView.com
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