The Bitcoin Fear & Greed Index shows that the sentiment around the asset has cooled off a bit recently, something that could pave the way for a rebound.
Bitcoin Fear & Greed Index Has Gone Through Some Decline Recently
The “Fear & Greed Index” is an indicator created by that tells us about the average sentiment present among the investors in the Bitcoin and wider cryptocurrency market
To determine the trader mentality, the index takes into consideration for these five factors: volatility, trading volume, social media sentiment, market cap dominance, and Google Trends.
The metric uses a numeric scale that runs from zero to hundred for representing this sentiment. A score of 46 or less implies the presence of fear among the investors, while that of 54 and above suggests greed in the market.
The territory between these two (47 to 53) naturally corresponds to the neutral mentality. Besides these three sentiments, there are also two extreme sentiments called “extreme greed” and “extreme fear.”
The extreme greed occurs at values above 75, while the extreme fear takes place below 25. Historically, these two sentiments have been quite relevant for BTC’s trajectory.
Tops have generally tended to form when the investors have held the former sentiment, while bottoms have been probable to happen when the market has been in the latter region.
At present, the traders are holding a mentality of extreme greed, as the latest data of the Bitcoin Fear & Greed Index shows.
Looks like the value of the metric is 77 at the moment | Source:
As is visible, the indicator’s value is 77 right now, meaning that while it’s indeed inside extreme greed, it’s only so just. This is a fresh change from how it has been recently, as the chart below displays.
The value of the indicator appears to have been going down recently | Source:
From the graph, it’s visible that the Bitcoin Fear & Greed Index has mostly stayed deep inside the extreme greed region recently. On the 14th of this month, the indicator hit the 88 mark, and alongside this high, the BTC price registered its current all-time high of about $73,800.
Since this peak, though, the asset has plunged, and it appears that alongside it, so has the sentiment among the traders. As mentioned earlier, tops have been more likely to occur when the market has shared a mentality of extreme greed and this probability has generally only gone up the more extreme levels the metric has hit.
This could perhaps explain why the recent top occurred when it did. Another top this month, the one that took place on the 5th, also coincided with high values in the Fear & Greed Index (a peak of 90 this time).
Shortly after this earlier peak and the plummet in the cryptocurrency that had followed, the asset found its bottom as the metric briefly exited the extreme greed region.
As the Bitcoin Fear & Greed Index is once again looking to dip outside this territory, it’s possible that a bottom may be near for the price this time as well. It now remains to be seen if the sentiment would cool down enough in the coming days so as to leave the extreme region behind, at least temporarily.
BTC Price
Bitcoin had plunged towards $64,500 during the weekend, but it seems the coin has made some recovery in the past day as it’s now back at $68,000.
The price of the coin seems to have gone through some volatility recently | Source:
Featured image from Yiğit Ali Atasoy on Unsplash.com, Alternative.me, chart from TradingView.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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