According to CryptoPotato, the Bitcoin Fear and Greed Index indicates that the sentiment of cryptocurrency investors has become neutral following Bitcoin's (BTC) drop below $57,000. Data from Alternative.me reveals that the index is at 54, a level not seen in three months, suggesting that investors are neither fearful nor greedy in the current market conditions.
The last time a neutral sentiment was observed among investors was on January 28, 2024, when BTC was priced around $42,000. During that period, the cryptocurrency was on an upward trend, and the market was abuzz with the launch of several spot Bitcoin exchange-traded funds approved by U.S. authorities two weeks earlier. However, the current market sentiment differs significantly. Bitcoin has fallen from its all-time high of $73,700 in mid-March, and after a period of increased volatility, the cryptocurrency's value took a downturn.
The Fear and Greed Index gauges market sentiment by analyzing various factors such as Bitcoin's dominance, social media activity, market momentum, trends, and volatility. The index ranges from 0 to 100, with 0 indicating extreme fear, 50 signaling neutrality, and 100 representing extreme greed. In recent weeks, investor sentiment has generally been greedy, occasionally reaching levels of extreme greed. The index was at 67 yesterday and 72 last week, suggesting that investors have been predominantly greedy. The index even spiked to 79 last month, indicating extreme greed.
Bitcoin's recent decline has seen it fall below key support levels, leading to the crypto market losing over $200 billion. In approximately 36 hours, BTC's value dropped over 11% from $64,100 to $56,700, pulling down altcoins and the rest of the crypto market with it. At the time of writing, BTC was trading at $57,200, still in the red but showing slight recovery. Analysts predict that BTC could fall further before resuming its rally, as deeper corrections have been observed in previous bull market cycles.