Data shows the Bitcoin investor sentiment has turned to greed for the first time since May as the asset’s price has shot up towards the $29,000 level.
Bitcoin Fear & Greed Index Is Pointing At “Greed” Now
The “Fear & Greed Index” is an indicator that tells us about the general sentiment among the investors in the Bitcoin and wider cryptocurrency market. The metric uses a numeric scale that runs from 0-100 for representing this sentiment.
All values of the index above the 54 mark imply that the investors are greedy right now, while those below 46 suggest the presence of fear in the market. The in-between region (values 47-53) signifies a neutral mentality.
Besides these core sentiments, there are also two special ones, called “extreme fear” and the “extreme greed.” The former occurs at values of the indicator below 25, while the latter takes place at values above 75.
Historically, these two extreme sentiments have been quite significant for the market as bottoms and tops have tended to take place during periods of extreme fear and extreme greed, respectively.
Now, here is what the Bitcoin Fear & Greed Index looks like right now, according to data from Alternative:
The market seems to be greedy at the moment | Source: Alternative
As you can see above, the Bitcoin Fear & Greed Index has a value of 59 currently. This suggests that the majority of the investors hold a sentiment of greed right now.
This is a fresh change, however, as the indicator had lesser values during the last few weeks. The below chart shows how the metric’s value has changed over the past year.
Looks like the indicator has observed a spike in recent days | Source: Alternative
From the graph, it’s visible that the Bitcoin fear and greed index had seen a plunge during early May and had fallen down to neutral territory. In the weeks that followed, the metric had only managed to break into the greed territory just once (16 May) and had instead gone down into the fear zone on a couple of occasions.
This worsening of the market sentiment had naturally come alongside the price of the asset registering a decline, as investors weren’t quite sure if bullish winds would return to the sector.
In the past day, however, the investor mentality has notably improved, as only yesterday the index had a value of 49, implying that the investors had been neutral.
This strong uplift in the sentiment towards greed has occurred as Bitcoin has observed a strong surge, which has taken the price near the $29,000 level. The improvement in the mentality can be a positive sign for the rally, as it implies that the general investor is supportive of the current price increase.
If the indicator continues to rise in the coming days and enters into the extreme greed territory, however, it might fire back for the asset. As mentioned before, high levels of greed have generally led to top formations for the asset.
BTC Price
At the time of writing, Bitcoin is trading around $28,900, up 11% in the last week.
BTC has seen a strong surge in the past day | Source: BTCUSD on TradingView
Featured image from André François McKenzie on Unsplash.com, charts from TradingView.com, Alternative.com
