Data indicates that Bitcoin investor sentiments have cooled down to their lowest levels since February. A rebound in price could be possible.
Bitcoin Fear & Greed Index Now Points At Just ‘Greed’
The “Fear & Greed Index“, is an indicator that was created by Alternative What does this tell us about general investor sentiment in Bitcoin and cryptocurrency?
To represent sentiment, this metric utilizes a scale of zero to one hundred. The index uses five different factors to calculate its score: trading volume, volatility, sentiment on social media, dominance of the market capitalization, and Google Trends.
All indicators above the mark of 53 suggest that investors are greedy. Below the level of 47, the market is fearful. This region corresponds with neutrality.
Here is how the latest value of the Bitcoin Fear & Greed Index looks:
The index value appears to be around 71 | Source: Alternative
As is visible above, the Bitcoin Fear & Greed Index currently has a value of 71, implying that the investors share a majority sentiment of greed. Yesterday, this index had a value that was much higher, suggesting a slight cooling of the sentiment over the past day.
Here is a graph that illustrates the trends in the Index over the last 12 months.
Source:| Source: Alternative
There are two other sentiments that go along with the core three. “extreme” Extreme fear and extreme greed are extreme emotions. Both extremes occur at values over 75 and below 25.
The Bitcoin Fear & Greed Index was 79 yesterday, implying that the market had been extremely greedy. This indicator has consistently been in this range for the last month. Therefore, the normal values of greed are against the trend.
Recent sentiments among investors have naturally been high because BTC’s price has seen a dramatic rise and is now exploring new heights. fresh all-time highs (ATHs).
Bitcoin’s price tends to move against expectations. This is because the higher the expectations, the more likely it will be that the price of Bitcoin moves in the opposite direction.
In the past, it was the assets with the highest extremes of sentiment that were most likely to reverse. As an example, the current ATH formed when the Index was valued at 88.
The recent drop in prices has affected sentiment as well. Its fall from the zone of extreme greed may have helped it form a bottom. When the index left the extreme greed zone, the previous bottom around 20th March also occurred.
The current level of the Bitcoin Fear & Greed Index is not only lower than it was then but also the lowest since 11 February, when the asset was still trading around $48,000.
BTC Price
Bitcoin’s value is down to $65,800, after it has suffered a decline of more than 7 percent over the past couple days.
The price of this asset is at a low. Source:| Source: BTCUSD on TradingView
Featured Image by Kanchanara from Unsplash.com. Charts from TradingView.com.
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