Data shows that Bitcoin sentiment has been on the brink of extreme greed lately, but investors don't seem ready to buy into the hype yet.
Bitcoin’s Fear and Greed Index now points to “greed”
“Fear & Greed Index” refers to an index created by Alternatives that tells us about the general sentiment of investors in Bitcoin and the broader crypto sector.
This index calculates sentiment as a number between 0 and 100. This calculation uses data from five factors: volatility, trading volume, social media sentiment, market cap dominance, and Google Trends.
A value of this indicator greater than 53 means that investors share the sentiment of greed. On the other hand, those under 47 suggest there is fear in the market. The area between these two thresholds corresponds to net neutrality thinking.
Well, here's what the Bitcoin Fear and Greed Index is doing right now.
Looks like the value of the index is 70 at the moment | Source: Alternative
As seen above, the latest value of the Fear & Greed Index is 70, suggesting that there is significant greed sentiment among traders overall. However, this is not a new development as the market has already entered this territory over the past week or so.
The chart below shows the trend of this metric over the past year.
The value of the metric appears to have shot up in recent days | Source: Alternative
The graph shows that the index had fallen into fear territory at the beginning of the month due to the bearish movement seen in prices. However, the rebound in recovery has significantly lifted the mood of traders.
In this latest streak of greed, the index reached a high of 73. This value is close to a special region called extreme greed that occurs above 75.
In the past, this indicator has generally broken out of this area during market euphoria. Such massive hype has historically led to high price ceilings.
There is a similar area on the fear side, known as extreme fear (occurs under the age of 25). The level of desperation in the market is so deep that it is generally easier for coins to form bottoms.
Bitcoin’s fear and greed index has stalled just above extreme greed territory for the past few days, likely due to the rally reversing.
But the fact that investors aren't just jumping on board the hype train yet means that at least excessive greed hasn't been an obstacle so far, so there are positives for this business to succeed. It may be a sign.
BTC price
Bitcoin has returned to $67,300 after rising above $69,000 a few days ago.
Looks like the price of the coin has seen a plunge recently | Source: BTCUSDT on TradingView
Featured image from Dall-E, Alternative.me, Chart from TradingView.com
