Bitcoin Sentiment Cools Off, Price Rebound Soon?
March 18 2024 - 9:30AM
NEWSBTC
The Bitcoin Fear & Greed Index shows that the sentiment around
the asset has cooled off a bit recently, something that could pave
the way for a rebound. Bitcoin Fear & Greed Index Has Gone
Through Some Decline Recently The “Fear & Greed Index” is an
indicator created by Alternative that tells us about the average
sentiment present among the investors in the Bitcoin and wider
cryptocurrency market To determine the trader mentality, the index
takes into consideration for these five factors: volatility,
trading volume, social media sentiment, market cap dominance, and
Google Trends. Related Reading: Bitcoin FOMO: Over 533,330
Addresses Bought Above $70,180 The metric uses a numeric scale that
runs from zero to hundred for representing this sentiment. A score
of 46 or less implies the presence of fear among the investors,
while that of 54 and above suggests greed in the market. The
territory between these two (47 to 53) naturally corresponds to the
neutral mentality. Besides these three sentiments, there are also
two extreme sentiments called “extreme greed” and “extreme fear.”
The extreme greed occurs at values above 75, while the extreme fear
takes place below 25. Historically, these two sentiments have been
quite relevant for BTC’s trajectory. Tops have generally tended to
form when the investors have held the former sentiment, while
bottoms have been probable to happen when the market has been in
the latter region. At present, the traders are holding a mentality
of extreme greed, as the latest data of the Bitcoin Fear &
Greed Index shows. Looks like the value of the metric is 77 at the
moment | Source: Alternative As is visible, the indicator’s value
is 77 right now, meaning that while it’s indeed inside extreme
greed, it’s only so just. This is a fresh change from how it has
been recently, as the chart below displays. The value of the
indicator appears to have been going down recently | Source:
Alternative From the graph, it’s visible that the Bitcoin Fear
& Greed Index has mostly stayed deep inside the extreme greed
region recently. On the 14th of this month, the indicator hit the
88 mark, and alongside this high, the BTC price registered its
current all-time high of about $73,800. Since this peak, though,
the asset has plunged, and it appears that alongside it, so
has the sentiment among the traders. As mentioned earlier, tops
have been more likely to occur when the market has shared a
mentality of extreme greed and this probability has generally only
gone up the more extreme levels the metric has hit. This could
perhaps explain why the recent top occurred when it did. Another
top this month, the one that took place on the 5th, also coincided
with high values in the Fear & Greed Index (a peak of 90 this
time). Related Reading: Bitcoin To $53,200? Why History Says It’s
Possible Shortly after this earlier peak and the plummet in the
cryptocurrency that had followed, the asset found its bottom as the
metric briefly exited the extreme greed region. As the Bitcoin Fear
& Greed Index is once again looking to dip outside this
territory, it’s possible that a bottom may be near for the price
this time as well. It now remains to be seen if the sentiment would
cool down enough in the coming days so as to leave the extreme
region behind, at least temporarily. BTC Price Bitcoin had plunged
towards $64,500 during the weekend, but it seems the coin has made
some recovery in the past day as it’s now back at $68,000. The
price of the coin seems to have gone through some volatility
recently | Source: BTCUSD on TradingView Featured image from Yiğit
Ali Atasoy on Unsplash.com, Alternative.me, chart from
TradingView.com
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