Crypto Investor Sentiment Returns To Bitcoin All-Time High Levels
Crypto investors are becoming more greedy as Bitcoin price breaks the $28,000 resistance. The Crypto Fear & Greed Index has now returned to levels not seen since November 2021, which was around the time the BTC price hit its all-time high.
Crypto investors are very greedy
Since the start of 2023, crypto investor sentiment has been in a slow but steady uptrend. 2022 ended in ‘Extreme Fear’ territory, which saw prices fall to new cycle lows. However, the change so far has been encouraging as the index has now returned to the ‘Greed’ level.
On Tuesday, the Fear and Greed Index hit a new 2023 high of 68, bringing it closer than ever to ‘Extreme Greed’. Now, this sentiment analysis is important because it helps you know how investors are feeling about the market.
When the index is scared, which is a score between 0-47, it shows that investors are very cautious of the market, so new money is not flowing into the market. But when the index is in greed, from 53 to 100, it means that investors are very greedy and are more likely to invest.
Crypto Fear & Greed Index recovers to November 2021 levels | Source: alternative.me
This means that the index reaching 68 indicates that crypto investors are looking favorably at the market. Since investors are more likely to take risks when they feel more bullish, this can often translate into higher prices as the market sees more liquidity.
But will Bitcoin rise after favorable sentiment?
During times when the Fear and Greed Index has entered greed territory, there are usually bullish price trends that are registered at the moment due to high positive sentiment in the market. Given this, there is a possibility that Bitcoin will continue its uptrend and likely break the $30,000 resistance.
However, just like in the cryptocurrency market, the possibility of a downtrend from here cannot be completely eliminated. That’s because sometimes periods of high positive sentiment can also signal a spike, as happened in November 2021. As such, investors can be bearish when taking advantage of the gains so far.
At this point, $30,000 still remains the level to beat if the digital asset is to fully convince investors that the bull market is back in all its glory. A similar trend was established in August 2020, right at the start of the bull market, so this could play out the same way.