Bitcoin Investors Are Still Fearful: What Needs To Happen For A Turnaround?
August 23 2024 - 12:30PM
NEWSBTC
Data shows that Bitcoin investors still hold a sentiment of fear as
the cryptocurrency’s price continues to consolidate. Bitcoin Fear
& Greed Index Is Currently Pointing At ‘Fear’ The “Fear &
Greed Index” is an indicator created by Alternative that, in short,
tells us about the general sentiment present among the traders in
the Bitcoin and wider cryptocurrency markets. Related Reading: Aave
Forms Sell Signal That Led To 27% Average Correction Last 4 Times
To determine this sentiment, the index uses the data related to the
following five factors: volatility, trading volume, social media
sentiment, market cap dominance, and Google Trends. The indicator
represents this mentality as a score between zero and hundred.
Investors share a sentiment of greed when the metric has a value
greater than 53. On the other hand, being under 47 implies
dominance of fear in the market. The region between these two
thresholds naturally corresponds to the neutral sentiment. Now,
here is what the current value of the Fear & Greed Index looks
like: As is visible above, the Bitcoin Fear & Greed Index is 34
at the moment, suggesting that the investors are feeling fear. The
current fearful mentality isn’t too strong, given the distance to
the neutral territory. Earlier in the month, the indicator had
shown particularly low values, as the chart below displays. On
August 6th, the Fear & Greed Index had hit a low of 17, the
lowest that it had gone in more than two years. When the indicator
achieves such low values, it no longer reflects just fear but
rather a special sentiment called extreme fear. Extremity fear is
defined as the zone that occurs at 25 and under. There is also a
similar region for the greed side, called extreme greed, occurring
over 75. Interestingly, the extreme fear low coincided with
Bitcoin’s bottom under the $50,000 level. This is similar to what
has been observed throughout the asset’s history. Related Reading:
These Are The Biggest Bitcoin Support & Resistance Zones,
Analyst Reveals BTC has tended to move opposite to the expectations
of the majority, and the extreme sentiment zones are evidently
where this expectation is the strongest, so it makes sense that
reversals in the price would also be the most likely to occur
inside them. With the sentiment sitting in the normal fear
territory and the Bitcoin price consolidating, another foray into
the extreme fear may be needed if Bitcoin has to kickstart fresh
bullish momentum. How the indicator develops in the coming days
remains to be seen. BTC Price Bitcoin has been unable to find a
solid break above the $61,000 level recently, and it appears that
the latest attempt may have ended in a similar failure as BTC,
which has retraced to $60,800. Featured image from Dall-E,
Alternative.me, chart from TradingView.com
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