Data shows that Bitcoin market sentiment has almost turned to extreme greed as the cryptocurrency's price surged to $68,000.
Bitcoin Fear and Greed Index Is Now in the Greed Zone
The “Fear & Greed Index” is an indicator created by Alternative that tells us about the average sentiment present among traders in the Bitcoin and broader cryptocurrency markets. The index uses data from the following five factors to determine sentiment: trading volume, volatility, social media sentiment, market cap dominance, and Google Trends. When found, it represents market sentiment as a score from 0 to 100.
When the figure is above 53, it means that traders are generally sharing a sense of greed at the moment. On the other hand, when it is below 47, it implies the dominance of fear in the market. The territory between the two corresponds to a net neutral sentiment.
In addition to these three main emotional zones, there are two special zones called extreme fear and extreme greed. The former appears in people under the age of 25, while the latter appears in people over the age of 75.
Here are the latest values of the Bitcoin Fear and Greed Index:
As can be seen above, the indicator has a value of 73, indicating that investors are currently displaying a significant amount of greed. This is a notable change from the market mood last week, when the indicator had dropped into the fear zone at that time.
The chart below shows how the value of the Bitcoin Fear and Greed Index has changed over the past year:
From the chart, it can be seen that this latest surge in sentiment, which came on the back of the asset’s rally to $68,000, has taken the index to its highest price since late July. At that time, the high sentiment value led to a peak for the cryptocurrency. This pattern has indeed been seen throughout history.
The fact is that Bitcoin tends to move in the opposite direction to what the crowd expects, and the likelihood of such a move going against the grain increases as traders lean toward one side.
At extremes, this possibility is strongest, so peaks and troughs often form when investors share these sentiments. The current value of the index is just outside the extreme greed zone, so a peak could become a possibility for the asset if investor sentiment continues to improve.
Market sentiment may not even need to improve further for such a scenario to occur, as the peak in July occurred when the index was at 74, just one unit higher than its current value.
BTC Price
At the time of writing, Bitcoin is trading at around $68,000, up more than 9% over the past week.
