The data shows that Bitcoin market sentiment has almost turned into extreme greed as the price of the cryptocurrency has risen to $68,000.
Bitcoin Fear & Greed Index Is In Greed Region
The “Fear and Greed Index” is an alternative index that tells us about the level of sentiment between Bitcoin traders and the broader cryptocurrency market. This index uses data from the following five factors to determine sentiment: trading volume, volatility, social media sentiment, market dominance, and Google Trends. Once obtained, it represents the market sentiment as a score between 0 and 100.
If the metric has a value greater than 53, it means that traders as a whole share a greedy sentiment right now. On the other hand, being below the 47 mark means the reign of fear in the market. The area between the two corresponds to absolute neutrality.
Besides these three main emotional states, there are also two special states called extreme fear and extreme greed. The first of these occurs at 25 and below, while the latter occurs at 75 and above.
Now, here is the latest value of the Bitcoin Fear & Greed Index:
As seen above, the index has a value of 73, which suggests that investors are currently showing a significant amount of greed. This is a significant change from the way the market situation was last week, as the index dropped to the fear zone at that time.
The chart below shows how the value of the Bitcoin Fear & Greed Index has changed over the past year:
From the graph, it can be seen that this recent uptick in sentiment, which came as a result of the stock rally at $68,000, took the index to its highest level since the end of July. At that time, high sentiment values ​​led the cryptocurrency to the top. This type of pattern is actually something that has been proven throughout history.
It turns out that Bitcoin has a tendency to move in the opposite direction to what the crowd expects and the likelihood of such a reverse movement increases when traders lean too much in one direction.
In extreme regions, this possibility is very strong, so tops and bottoms are often formed when investors share these feelings. The current value of the index is just outside the extreme selfish zone, so upside may be possible for the stock if investor sentiment continues to improve.
Sentiment may not even need to develop further for such a trend to follow, as the high back in July occurred when the index had a value of 74, only one unit higher than the current one.
BTC price
At the time of writing, Bitcoin is trading around $68,000, up more than 9% over the past week.