Data shows that Bitcoin investors still hold a sentiment of fear as the cryptocurrency’s price continues to consolidate.
Bitcoin Fear & Greed Index Is Currently Pointing At ‘Fear’
It is important to note that the word “you” means “you”. “Fear & Greed Index”The indicator is created by Alternative That, in short tells us the sentiment among traders on the Bitcoin and wider cryptocurrency market.
This index is based on five data points: trading volume, volatility, social media sentiments, market cap dominance and Google Trends. The indicator scores this mentality between zero to hundred.
When the value of this metric is greater than 53, investors share an attitude of greed. A value below 47 indicates that fear is dominant in the market. Between these two thresholds, neutrality is the natural sentiment.
Now, here is what the current value of the Fear & Greed Index looks like:
As is visible above, the Bitcoin Fear & Greed Index is 34 at the moment, suggesting that the investors are feeling fear. The current fearful mentality isn’t too strong, given the distance to the neutral territory.
As the graph below shows, earlier in the month the indicator showed particularly low values.
On August 6th, the Fear & Greed Index had hit a low of 17, the lowest that it had gone in more than two years. It is not just fear that the Fear & Greed Index reflects when its values are so low. Instead, it’s a feeling called extreme fear.
Extremity fear can be defined as the area that is 25 years old and younger. The greedy side is also divided into a region. extreme greed, occurring over 75.
Interestingly, the extreme fear low coincided with Bitcoin’s bottom under the $50,000 level. This is similar to what has been observed throughout the asset’s history.
BTC’s price has often moved in opposition to what the majority expected. Since the sentiment extreme zones have the highest level of expectation, it is not surprising that the reverse would occur most frequently within them.
Bitcoin’s price is consolidating and sentiment is in normal fear. Another foray to extreme fear could be necessary to begin a new bullish trend. The future development of the indicator will be interesting to watch.
BTC price
Bitcoin failed to make a break over $61,000 recently. The latest attempt to do so may also have been unsuccessful, with BTC retracing to $60,800.
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Source: www.newsbtc.com