Bitcoin Sentiment Back To Greed As BTC Breaks $28,900
The data shows that sentiment in Bitcoin and the wider cryptocurrency market has returned to greed as the price of BTC surpassed $29,000.
Bitcoin Fear and Greed Index Now Points to “Greed”
The “Fear & Greed Index” is an indicator that tells us about the general sentiment among investors in Bitcoin and the wider cryptocurrency sector. The metric uses a numeric scale ranging from 0 to 100 to represent this sentiment.
All index values below the 50 mark indicate that investors are fearful right now, while those above that threshold suggest that the market is currently greedy. Although this cutoff can be cleared in theory, the region between the values of 46 and 54 (that is, the boundary of the two sentiments) is considered to be a neutral sentiment.
There are also two “extreme” feelings, called extreme fear and extreme greed, which occur at values less than 25 and greater than 75, respectively. These mindsets were historically important for the market, as cyclical bottoms formed in the first region, while tops formed in the second.
For this reason, some investors believe that it is optimal to buy during extreme fear, while extreme greed presents the best selling opportunities. Followers of this philosophy are called “contrarian traders”. Warren Buffet’s popular quote sums up the same idea well: “Be afraid when others are greedy and greedy when others are afraid.”
Now, here is 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 greedy at the moment. Just yesterday, the mindset in the industry was different as holders shared a neutral sentiment.
The chart below shows how the value of the indicator 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 was stuck in the fear and extreme fear zones during the 2022 bear market, but with this year’s rally, the sentiment managed to return to neutral and greedy values.
Between March 18th and April 19th, the indicator held relatively high greed values, but the recent drop in price from over $30,000 to the low levels of $27,000 naturally resulted in the impact of market mindset.
In the days that followed, investors assumed neutral sentiment (except for a brief spike in greed on the 23rd). With the price rising above $29,000 over the past 24 hours, however, the indicator has once again bounced back to greedy values.
It is currently unclear whether the Bitcoin market can maintain this new momentum or if it is just a temporary upswing. At the very least, general investor sentiment suggests they support the rise.
At the time of writing, Bitcoin is trading around $29,900, up 1% over the past week.
BTC has sharply surged in the past day | Source: BTCUSD on TradingView
Featured image of André François McKenzie on Unsplash.com, charts by TradingView.com, Alternative.me