Data shows that Bitcoin's fear and greed index has not yet reached extreme values. Here's what this means for BTC's price recovery.
Bitcoin’s Fear and Greed Index currently sits at 75
What is “Fear & Greed Index”? alternative This speaks to the average sentiment that exists among investors in Bitcoin and the broader crypto market.
The index is estimated based on five factors: volatility, trading volume, social media sentiment, market capitalization dominance, and Google Trends. This indicator represents the calculated sentiment as a score from 0 to 100.
A value of less than 47 for this indicator means that the overall sentiment of fear is shared by investors. On the other hand, above 53 means there is greed in the market. All values between these two cutoffs correspond to an overall neutral mindset.
Well, here are the latest values of the Bitcoin Fear and Greed Index:
Looks like the metric is at a value of 75 at the moment | Source: Alternative
As seen above, traders in this sector are currently in a greedy mentality as the index remains at 75. This greedy mentality is also very powerful, in fact, so strong that it is on the edge of a special zone known as Extreme. greedy.
Extreme greed occurs when the indicator crosses this 75 level. There is a similar area on the fear side, called extreme fear. This occurs when the metric is below 25.
The current value is noticeably improved compared to a few days ago, but unchanged from yesterday. This is interesting because the cryptocurrency has only continued to recover over the past day.
The chart below shows the historical value of Bitcoin's Fear and Greed Index over the past year.
The indicator appears to have seen a rise in recent days | Source: Alternative
Historically, Bitcoin has tended to move in a direction contrary to the majority's expectations, and the likelihood of such an adverse move only increases as the crowd's confidence increases. Therefore, the highs and lows of an asset typically occur when the index is in its respective extreme zones.
BTC rose further today as the indicator value is likely to be higher tomorrow, but the coin is rising towards all-time highs while the indicator remains out of the extreme greed zone. The fact could be a positive sign for BTC and its sustainability.
Last month's price high coincided with the Fear and Greed index reaching 87, while March's price was 88. While the next high could occur below these levels, it still provides a point of reference for when sentiment really starts to heat up. .
BTC price
As of this writing, Bitcoin is trading around $104,800, up over 11% over the past week.
The price of the coin is fast charging toward its ATH | Source: BTCUSDT on TradingView
Featured image from Dall-E, Alternative.me, Chart from TradingView.com
