Bitcoin Sentiment Whiplash: Mood Sours From Greed | Crypto News
Data reveals the Bitcoin market sentiment has seen a sharp turnaround lately as the Fear & Greed Index has swung to excessive worry.
Bitcoin Fear & Greed Index Is Back In Extreme Fear Zone
The “Fear & Greed Index” refers to an indicator created by Alternative that tells us about the average sentiment current among merchants in the Bitcoin and wider cryptocurrency markets.
The index makes use of the data of the next 5 components to decide the investor mentality: market cap dominance, trading quantity, volatility, Google Trends, and social media sentiment. To symbolize the sentiment, it makes use of a numerical scale operating from zero to hundred.
When the worth of the Fear & Greed Index is bigger than 53, it means a sentiment of greed is shared by the bulk of merchants. On the other hand, the indicator being below 47 implies the dominance of worry. All values mendacity between these two cutoffs correspond to a web impartial mentality.
Besides these three core areas, there are also two ‘excessive’ zones, recognized as the acute worry (occurring at 25 and under) and excessive greed (above 75). At current, the market sentiment is in one of these zones, as the Fear & Greed Index’s latest worth suggests.
As displayed above, the Bitcoin market sentiment is just inside the acute worry territory proper now, with the Fear & Greed Index sitting at 24. This stage of despair among merchants is a new development, as just earlier temper was a lot better.
On January fifteenth, the index had a worth of 61, placing the sentiment of the average investor firmly inside the greed territory. Only six days later, the state of affairs has fully flipped.
The cause behind this shift lies in the bearish price motion that the cryptocurrency has confronted since US President Donald Trump announced tariffs on a number of European nations over Greenland.
The earlier greed sentiment also got here after trader mentality noticed a sharp swing. In fact, the shift was even sooner back then, as the Fear & Greed Index went from a near-extreme worry stage of 26 to the grasping worth of 61 over just two days as Bitcoin witnessed a price surge past $97,000.
The latest drop back into the acute zone could not solely be a destructive development for the cryptocurrency, though, if historical past is something to refer to. Often, digital asset markets have tended to transfer in the direction that goes opposite to the expectations of the bulk.
Since excessive worry is where a bearish mentality is the strongest, bottoms may be probably to happen in the zone. Similarly, excessive greed can lead to tops instead. With the sentiment presently in the previous zone, it now stays to be seen how long it’ll take for Bitcoin to discover back its footing.
BTC Price
Bitcoin dropped under $88,000 earlier in the day, but the coin has since bounced back to $90,200.
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