Bitcoin Sentiment Returns To Neutral, Will Traders Embrace Greed Next?
August 31 2023 - 9:00AM
NEWSBTC
Data shows that Bitcoin investors may be close to embracing greed
as market sentiment has surged into neutral territory. Bitcoin Fear
& Greed Index Points At Neutral Trader Sentiment The “Fear
& Greed Index” is an indicator that tells us about the general
sentiment among the investors in the Bitcoin and wider
cryptocurrency sector. According to the index’s creator,
Alternative, the metric takes into account multiple factors for
calculating this sentiment. The five factors it currently uses in
the indicator’s value are namely: volatility, trading volume,
social media sentiment, market cap dominance, and Google Trends
data. Earlier, the index also made use of surveys, but for now,
they are on pause. To represent the market sentiment, the fear and
greed index uses a numeric scale that runs from 0-100. All values
above the 54 mark suggest greed among the traders, while values
below 46 imply fear. The in-between region means the presence of a
neutral mentality. Besides these three basic sentiments, there are
also two extreme sentiments, called “extreme fear” (taking place
below 25) and “extreme greed” (occurring above 75). Historically,
these two regions have been quite significant for Bitcoin, as
cyclical bottoms and tops have usually formed in the respective
zones. Related Reading: $28,100 Next Level To Break For Bitcoin,
Here’s Why Now, here is what the Fear & Greed Index looks like
for the market right now: The value of the metric appears to be 52
at the moment | Source: Alternative According to the index, the
investors as a whole are sharing a neutral sentiment, meaning that
they aren’t leaning one way or the other. Although, at the current
52 value, the metric is certainly closer to the greed territory
than the fear one. Earlier in the month, when BTC witnessed a crash
from the $29,000 level to below the $26,000 mark, the sentiment in
the market naturally plummeted. Investors had become fearful and
had remained so for the duration that the asset consolidated around
these lows. After the rally spurred by Grayscale’s lawsuit victory,
though, the sentiment rapidly registered an improvement and surged
toward the current neutral values. The below chart represents how
the Fear & Greed Index’s value has changed recently: Looks like
the indicator's value has observed a sharp uplift in recent days |
Source: Alternative While the sentiment in the market has seen a
rapid improvement with the latest rally, the investors haven’t
quite yet made up their minds if they want to give in to greed or
not. Related Reading: Cardano HODLing: Long-Term Holders See 170%
Rise In Past Year It’s possible that more positive price action
would need to happen before the investors are able to fully embrace
the bullish momentum. Nevertheless, a break into the greed
territory would naturally be a green signal for any surge’s
sustainability, as it would mean that the majority of the investors
are ready to support the move. BTC Price After observing a pullback
since the rally high, Bitcoin is currently trading around the
$27,200 level, with investors still enjoying profits of about 3%
over the past week. The BTC price surge has slowed down | Source:
BTCUSD on TradingView Featured image from Jievani Weerasinghe on
Unsplash.com, charts from TradingView.com, Alternative.me
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