Cryptocurrency markets are once again full of greed after Bitcoin (BTC) rose to a three-week high above $66,000.
According to data from Alternative.me, the Cryptocurrency Fear and Greed Index currently stands at 74, indicating that the period of greed continues among digital asset investors.
Cryptocurrency investors are greedy
The rise in greed sentiment in the cryptocurrency market occurs after a period of neutrality among market participants. crypto potato reported earlier this month that the Fear and Greed Index hit 54 for the first time since January, indicating neutral sentiment among investors, while BTC traded in a range of $57,000 to $60,000.
At the time, BTC and the broader cryptocurrency market experienced increased volatility and a significant decline in market capitalization. At one point, BTC fell below a key support level and crashed 11% within 36 hours.
The crash wiped out more than $200 billion from the cryptocurrency market and left a trail of ruin among altcoins and memecoins. Digital asset investment funds were particularly affected, with some networks experiencing outflows for several weeks in a row.
However, the tide turned this week, and the bulls took over the reins on Monday. After hovering around $61,000 over the weekend, BTC soared to $63,000 on Monday, before clinging to $64,000 on Wednesday. At the time of writing, the leading cryptocurrency is trading at $66,200, up 5% over the past seven days.
Bitcoin's upward trajectory has extended to the spot exchange-traded fund (ETF) market, with inflows surging to multi-week highs. On Wednesday, inflows into the ETF reached $303 million, the first time since May 3. Yesterday, inflows into the fund totaled $257 million. The second consecutive day of large inflows contrasts with the past two weeks, when most were less than $100 million.
What happens next?
For the uninitiated, the Fear and Greed Index determines investor sentiment by analyzing several factors such as market momentum, volatility, Bitcoin dominance, trends, and social media. On a scale of 0 to 100, 0 indicates extreme fear, 50 indicates neutrality, and 100 indicates extreme greed.
Since the index is in the greedy stage, any further rally in the market could push the index into the extreme greedy zone. Unfortunately, this leaves room for correction, as is often the case in the crypto market.
Either way, the surge in liquidity flowing into the market could push BTC to higher levels from its current price range.
