Data shows that the Bitcoin Fear & Greed Index has still not reached an extreme value. Here’s what this could mean for the BTC price recovery.
Bitcoin Fear & Greed Index currently sits at 75
The “Fear & Greed Index” refers to an indicator created by Alternative that tells us about the average sentiment present among investors in the Bitcoin and broader cryptocurrency markets.
This index bases its estimate on the following five factors: volatility, trading volume, social media sentiment, market cap dominance and Google Trends. The indicator represents sentiment calculated as a score between zero and one hundred.
When the indicator has a value below 47, it means that investors as a whole share a sense of fear. On the other hand, a number above 53 implies the presence of greed in the market. All values between these two thresholds correspond to a generally neutral mentality.
Now here is what the latest value of the Bitcoin Fear & Greed Index looks like:
Looks like the metric is at a value of 75 at the moment | Source: Alternative
As can be seen above, traders in the sector are currently harboring a sense of greed as the index sits at 75. This greed mentality is also quite strong, in fact so strong that it is right on the edge of a special zone known as the extreme. greed.
Extreme greed occurs when the indicator rises above this level 75. There is also a similar region on the fear side, called extreme fear. This occurs when the metric falls below 25.
The current value represents a notable improvement from a few days ago, but is unchanged from yesterday. This is interesting because the cryptocurrency has only continued its recovery over the past day.
The chart below shows a record of Bitcoin Fear & Greed Index values over the past year.
The indicator appears to have seen a rise in recent days | Source: Alternative
Historically, Bitcoin has tended to move in ways that go against the expectations of the majority, with the likelihood of such an opposing move only increasing as the crowd becomes more secure. For this reason, the asset’s ups and downs usually occurred when the index was in the respective extreme zone.
BTC continued its advance today as the indicator value will likely be higher tomorrow, but the fact that the coin rallied towards its all-time high while the index was outside the greed zone extreme could be a positive sign for its sustainability.
Last month’s price peak coincided with the Fear and Greed Index reaching 87, while March’s reached 88. It is possible that the next peak will occur below these levels, but they provide always a reference for when the feeling starts to really heat up. .
BTC Price
At the time of writing, Bitcoin is trading around $104,800, up more than 11% over the past week.
The price of the coin is fast charging toward its ATH | Source: BTCUSDT on TradingView
Featured image of Dall-E, Alternative.me, chart by TradingView.com
