Bitcoin Extreme Greed At Levels Higher Than Nov. 2021 Peak, Top Signal?
05 März 2024 - 5:00PM
NEWSBTC
Data shows the Bitcoin sentiment has now reached extreme greed
levels higher than even those at the price all-time high (ATH) in
November 2021. Bitcoin Fear & Greed Index Is Deep Inside
Extreme Greed Territory Now The “Fear & Greed Index” is an
indicator created by Alternative that keeps track of the general
sentiment present among the investors in the Bitcoin and wider
cryptocurrency market right now. The metric represents this average
sentiment in the form of a score lying in the zero to hundred
range. To calculate this score, the index takes into account the
following five factors: volatility, trading volume, social media
sentiment, market cap dominance, and Google Trends. Related
Reading: Shiba Inu & Other Memecoins See 3,000% Spike In
Volume: Good Sign For Rally? When the indicator shows a value less
than 47, it means that the sentiment around the sector is that of
fear. On the other hand, the index being above the 53 mark implies
the presence of greed among the investors. Naturally, the region
between these two territories belongs to the neutral mentality.
Besides these three main sentiments, there are two “extreme”
sentiments called extreme fear and extreme greed. The former of
these occurs at and below 25, while the latter is 75 and above.
Now, here is what the Bitcoin Fear & Greed Index currently
looks like: The indicator appears to have a very high value at the
moment | Source: Alternative As is visible above, the Bitcoin Fear
& Greed Index’s current value is 90, which means that the
investors are holding a strong sentiment of extreme greed. This
latest value is quite the jump from the sentiment from yesterday,
when the index was around 82. The reason behind this sharp increase
in the indicator is obviously because of the fact that the
cryptocurrency’s price has been pushing towards a new all-time high
during its latest rally. The current level of the Fear & Greed
Index isn’t only high compared to the recent trend, but also when
considering the historical data. The below chart shows how the
metric’s value has fluctuated since its inception back in 2018: The
data for the metric over its entire history | Source: Alternative
As displayed in the graph, the Bitcoin Fear & Greed Index has
now surpassed the level that it assumed during the November 2021
price all-time high, as it stands at values just below those
observed between late 2020 and early 2021. Besides this period,
there has only been one other instance in the history of the metric
where it has achieved levels higher than now: the rally peak during
mid-2019. Historically, Bitcoin has tended to move against the
expectations of the majority, and as this expectation has leaned
more towards one side, the probability of such a contrary move
taking place has only gone up. Related Reading: CryptoQuant’s
Bitcoin “Bull-Bear” Indicator Flags Price As Overheated The top in
the 2019 rally and November 2021 are just two such examples of this
pattern in action. As such, it’s possible that the current extreme
levels of the indicator mean that the price is at risk of forming a
top right now. It should be noted, however, that a top doesn’t
necessarily have to immediately follow, as during the first half
2021 bull run, the metric was able to maintain at even higher
levels for a while, without the rally being compromised. BTC Price
Bitcoin was on the brink of setting a new all-time high just
earlier, but its price has since cooled off towards the $66,700
level. Looks like the price of the coin has been marching up during
the past couple of days | Source: BTCUSD on TradingView Featured
image from iStock.com, Alternative.me, chart from TradingView.com
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