After Three Months Of Fearful Market, Bitcoin Sentiment Turns Greedy Again
Data shows the Bitcoin market has turned greedy again after almost three months of fear sentiment among investors.
Bitcoin Market Becomes Greedy Again After Almost Three Months Of Fear
The relevant indicator here is the “Fear and Greed Index,” which tells us what the general sentiment among investors is currently.
The metric uses a numerical scale that ranges from zero to one hundred to represent this feeling. All values below 50 fall into the “fear category,” while those above belong to “greed.”
When the index shows extreme values of over 75 and below 25, the market sentiment is that of extreme greed and extreme fear.
Some investors prefer to sell when the market is extremely greedy, as in the past, highs have formed during such periods. Similarly, they also think it is better to buy during extreme fear since lows usually occur then.
There is a famous Warren Buffet quote that resonates with this philosophy: “be fearful when others are greedy, and greedy when others are fearful.”
Now, here is a chart from this week’s Arcane Research report that shows the trend in the Bitcoin fear and greed index over the past year:
There is a famous quote from Warren Buffet that aligns with this philosophy: “Be fearful when others are greedy, and greedy when others are fearful.”
Now, here is a chart from Arcane Research’s weekly report this week that shows the development of the Bitcoin Fear and Greed Index over the past year:
The value of the indicator appears to have risen sharply recently | Source: The Arcane Research Weekly Update - Week 5
As you can see in the above graph that came out yesterday, market sentiment had almost left the fear zone as the indicator showed a value of 48
Since November, the market has been quite fearful and often dipped into extreme fear. But recently, the metric has seen a strong uptrend, and today, investor sentiment is finally back to greed for the first time in three months as the index value now stands at about 54
The Bitcoin fear and greed index has now crossed the fifty mark | Source: Alternative.me
Market sentiment turning towards greed can prove bullish for the price of Bitcoin as it usually occurs during bull rallies.
Related Reading | Bitcoin Taker’s Buy/Sell ratio shows “buy” signal as BTC takes off
BTC Price
At the time of writing this article, the price of Bitcoin is hovering around $43,500, up 13% in the past seven days. Over the past month, the cryptocurrency has gained 5% in value.
BTC's price seems to have surged over the past few days | Source: BTCUSD on TradingView
In recent weeks, Bitcoin has experienced a strong uptrend. Yesterday, the price of the crypto briefly broke through the $45,000 mark, but it did not take long for the coin to fall back to the current level.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research
The relevant indicators here are the “Fear and Greed Index”, which tells us what the overall sentiment of investors is at present.
The index uses a numerical scale from zero to one hundred to represent this sentiment. All values below 50 belong to the “fear” category, while values above 50 belong to “greed”.
When the index displays extreme values of 75 or above and 25 or below, the market sentiment is extreme greed and extreme fear, respectively.
Some investors prefer to sell when the market is extremely greedy, as this has historically formed tops. Similarly, they also believe that buying during extreme fear is better, as that is usually when the market bottoms out.
The famous quote by Warren Buffet resonates with this philosophy: “Be fearful when others are greedy and greedy when others are fearful.”
Now, this is the chart from this week’s Arcane Research report, showing the trend of the Bitcoin fear and greed index over the past year:
As you can see in the above chart, when yesterday’s report was released, the market sentiment was almost out of the fear zone, with the index showing a value of 48.
Since May, the market has been very fearful, often falling into extreme fear. But recently, the index has shown a sharp upward trend, and today, investor sentiment has finally returned to a greedy state for the first time in three months, as the index value is now around 63.
The market turning towards greed can prove beneficial for Bitcoin prices, as this sentiment usually occurs during bull market rebounds.
At the time of writing this, the price of Bitcoin is hovering around $43.5k, up 5% in the past 13 days. In the past month, the value of the cryptocurrency has risen by 60%.
The following chart shows the trend of Bitcoin prices over the past five days:
In the past few weeks, Bitcoin has experienced some sharp upward trends. Yesterday, the price of the cryptocurrency briefly surpassed the $45k mark, but soon after, the token returned to its current level.
