Bitcoin Investors Remain Greedy, But Why Are Prices Falling?
Bitcoin and other cryptocurrencies on the market have been seeing abysmal price action lately. This is despite the fact that the Fear & Greed Index shows that investors are still very greedy when it comes to digital assets. So why are prices still falling?
Investors await release of CPI data
The latest iteration of the United States Consumer Price Index (CPI) is scheduled to be released later this week and cryptocurrency investors seem to be waiting for that before taking any action. The launch will take place on May 10, 2023 and will show whether inflation in the country has increased, decreased or remained the same, which can have a major impact on the financial market.
If inflation picks up, the Fed could resume a hawkish stance that would be brutal for risky assets like Bitcoin. However, if the inflation numbers are much lower, a dovish stance from the Fed is expected, thus leaving plenty of room for investors to take more risk.
Lastly, if inflation stays the same, it’s safe to assume that there wouldn’t be much impact on the financial market and the cryptocurrency market by extension. Although what this might do is support current market sentiment and if the bulls continue to prevail then the momentum for an uptrend would likely increase compared to a downtrend.
Bitcoin Fear and Greed Index Remains Strong
The Bitcoin Fear & Greed Index still points to strong bullish sentiment among investors in the market as the ‘greed’ trend continues. This shows that crypto investors are still looking on the upside, but the drop in the market shows some level of caution despite this optimism.
Interestingly, the market also finished last week strong around this level, but today’s index score of 60 points to a decline in greed. However, it remains at a reasonably high level compared to the 2022 figures.
Fear & Greed Index remains in greed | Source: alternative.me
A reversal in the market trend from here could send the Fear Greed Index back in the direction of ‘extreme greed’ once again. But while this level of greed is welcome in the market due to rising prices, it is known to mark the top of market highs, leaving a bittersweet taste in investors’ mouths each time.
Bitcoin price is currently trading below $28,000 after breaking above $31,000 last month. It is seeing losses of 2.97% on the daily chart, which reduces its market cap to $541 billion.