The data shows that Bitcoin sentiment has cooled from extreme bullishness as bearish price action continues in BTC and other cryptocurrencies.
Bitcoin Fear & Greed Index Now Points to ‘Greed’
The “Fear & Greed Index” is an alternative index that tells us about the sentiment level between Bitcoin investors and the broader cryptocurrency market.
This metric uses a numerical scale from zero to one hundred to represent sentiment. All values ​​above the 53 mark are consistent with investors holding a sense of greed, while those below 47 suggest fear in the market. The middle of the cut-off indicates a neutral attitude.
Now, here’s what the Bitcoin Fear & Greed Index has to say about current market sentiment:
The value of the index appears to be 74 at the moment | Source: Alternative
As seen above, the index has a value of 74, which means that investors share a feeling of greed at the moment. This current value is also very deep in the region, so deep that it sits right on the edge of a special place called extreme greed.
The market experiences extreme greed whenever the index crosses above the 75 mark. There is also a similar side of fear, known as extreme fear, which occurs under the age of 25.
Extreme sentiment has historically been very important to Bitcoin and other cryptocurrencies, as tops and bottoms often occur in these regions.
The relationship between sentiment and price has been inverse, meaning that extreme greed was where the top occurred, while extreme fear is the region of the bottoms.
During the latter leg of a bull run, the indicator usually spends time within the extreme greed zone. The metric was in place just yesterday.
Looks like the value of the metric has registered a cooldown in recent days | Source: Alternative
The change in sentiment has come as BTC has seen a pullback and the altcoin market has passed the risk. Given the historical pattern that Bitcoin tends to see, this recent cooling in investor sentiment could be positive and allow the rally to see a continuation.
In other news, the Estimated Leverage Ratio of the BTC-USDT pair has seen a decline recently, as CryptoQuant founder and CEO Ki Young Ju revealed in an X post.
The trend in the BTC-USDT Futures Leverage Ratio over the last couple of years | Source: @ki_young_ju
The Estimated Leverage Ratio measures the average amount of leverage that futures market users prefer. The fact that this metric has registered a decline recently can be positive for Bitcoin, as it means that there is a low risk of a mass liquidation event.
BTC price
Bitcoin went as low as $94,300 yesterday, but it seems that the coin quickly recovered as its price has already recovered to $98,500.
The price of the coin appears to have seen a pullback during the last few days | Source: BTCUSDT on TradingView
Featured image from Dall-E, CryptoQuant.com, Alternative.me, chart from TradingView.com
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