The data shows that Bitcoin is on the verge of entering the extreme greed zone. Here’s what this could mean for the cryptocurrency’s price.
Bitcoin Fear & Greed Index Has Continued To Decline Recently
It is important to note that the word “you” means “you”. “Fear & Greed Index”It is an indicator that was created by Alternative What does this tell us about traders’ current sentiment?
This index is based on five different factors: trading volume, volatility, social media dominance, market capitalization, and Google Trends. This metric represents mentality using a numerical scale of zero to one hundred.
All values over 53 suggest that investors are greedy, and those under 47 indicate that fear is dominant. This region between the two thresholds is neutral.
Now, here is what the Bitcoin Fear & Greed Index is looking like right now:
As is visible above, Bitcoin Fear & Greed currently has a value of 28, meaning that the average investor is showing fear. This current value must be a sign of a high level of fearfulness, since it is so far into territory.
The latest indicator level is very close to the special area called the “extreme fear.”Investors show extreme fear if the index falls below 25. Also, there is a zone that is similar for investors who are greedy. This is the “extreme greed”If you are over 75, then it is a ‘and occurs.
The metric was in the second region or very close during the first half last month. recent downturn The market’s deterioration has shifted the mood to the opposite end.
In the past, Bitcoins and other crypto currencies have shown a tendency to move in opposite directions to what most people expect. The stronger the crowd’s expectation gets, the higher the probability of such a contrary move becomes.
Extreme emotions are when the traders have a tendency to lean in one particular direction. As a result, when an index falls into these zones, it is more likely to form major tops and lows for the asset.
Some traders will buy during times of extreme fear, and sell when there is extreme greed. The popular name for this trading philosophy is “contrarian investing.” Warren Buffet’s famous quote sums up the idea, “be fearful when others are greedy, and greedy when others are fearful.”
As the Bitcoin Fear & Greed index is approaching the extreme fear territory, it’s possible that the cryptocurrency could once again show profitable entry points soon, if the past is anything to go by.
BTC price
Bitcoin is yet to recover much after its recent collapse, with its current price hovering around $56,700.
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Source: www.newsbtc.com
