Bitcoin Sentiment Returns To Extreme Greed As BTC Breaks $71,000
March 26 2024 - 1:00PM
NEWSBTC
Data shows the Bitcoin market sentiment has returned to the extreme
greed territory as BTC has registered its rally beyond the $71,000
level. Bitcoin Fear & Greed Index Now Points To “Extreme Greed”
The “Fear & Greed Index” is an indicator made by Alternative
that tells us about the general sentiment among the investors in
the Bitcoin and wider cryptocurrency market. This index represents
the sentiment as a score between zero and hundred. To calculate
this value, the indicator takes into account the data of these
factors: volatility, trading volume, social media sentiment, market
cap dominance, and Google Trends. Related Reading: Bitcoin Top In
Yet? What The Legendary MVRV Ratio Says When the indicator has a
value of 46 or less, it means that the average investor holds a
sentiment of fear right now. On the other hand, a value of 54 or
more implies the market shares a majority mentality of greed.
Naturally, the region in-between these two (47 to 53) corresponds
to the neutral sentiment. Now, here is what the latest value of the
Bitcoin Fear & Greed Index looks like: The index appears to
have a value of 81 at the moment | Source: Alternative As is
visible above, the Bitcoin Fear & Greed Index is at 81 right
now, meaning that it’s deep into the greed region. In fact, this
value is so deep that it’s inside a territory known as “extreme
greed.” Extreme greed occurs when the index hits values higher than
75. Fear also has its own extreme region; this one occupying values
under 25. Historically, these two sentiments have proven to be
particularly significant for the market. BTC and other assets in
the sector have often tended to move in the opposite direction from
what the majority expect. In the territory of the extreme
sentiments, this expectation is naturally the strongest, and hence,
the probability of a contrary move taking place is also the
highest. Because of this reason, major tops and bottoms in
Bitcoin’s price have typically taken shape when the cryptocurrency
has been inside the respective extreme zones. Earlier in the month,
the Fear & Greed Index had assumed especially high extreme
greed levels, as the asset’s rally towards new all-time highs
(ATHs) had occurred. Two of the major tops in this period,
including the current ATH, coincided with peaks in the indicator,
implying that the overheated sentiment may have once again played a
role. Looks like the value of the metric has turned around in the
past day | Source: Alternative With the recent drawdown in the
asset, though, the sentiment also cooled off and exited out of the
extreme greed territory, as is visible in the above chart. In
bullish periods, the sentiment retreading back to the normal greed
region can be a positive sign for fresh upward moves to start. And
indeed, this has followed for the cryptocurrency this time as well,
as its price has made notable recovery over the past couple of
days. With the coin making a return back towards $71,000, the
sentiment has also heated up again, hence why the index’s latest
value is pointing at extreme greed. Related Reading: Bitcoin
Retests Resistance: Here’s The Level A Break Could Lead To The
aforementioned tops from earlier in the month occurred at Fear
& Greed Index values of 90 and 88, respectively, suggesting
that the current extreme greed value of 81 may not be too high for
another peak to be probable. BTC Price Bitcoin had broken above the
$71,000 level earlier in the day, but the digital asset has since
registered a bit of a pullback towards $70,700. The price of the
coin seems to have sharply risen over the past two days | Source:
BTCUSD on TradingView Featured image from Shutterstock.com,
Alternative.me, chart from TradingView.com
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