Data exhibits the Bitcoin market sentiment has turned impartial at present as the value of the cryptocurrency has taken a plunge beneath the $29,000 degree.
Bitcoin Fear & Greed Index Has Retreated To “Neutral” Territory
The “Fear & Greed Index” is an indicator that tells us concerning the basic sentiment amongst buyers within the Bitcoin and wider cryptocurrency market. This metric makes use of a numeric scale that runs from 0-100 for representing this sentiment.
All values of the index above the 50 mark indicate that buyers are grasping at present, whereas these beneath this threshold counsel the market is fearful proper now.
While this cut up could also be even in idea, the territory on the boundary of those ranges is usually thought-about to belong to a “neutral” sentiment. To be extra particular, the values between 46-54 might signify a impartial market.
Besides these three sentiments, there are additionally two different “extreme” ones, particularly “extreme fear” and “extreme greed.” The former of those happen at values lower than 25 and holds significance because the area the place cyclical bottoms have traditionally shaped for the cryptocurrency.
Similarly, the latter area, which takes place above a price of 75, is the place tops have usually taken form for the market. Because of this obvious relationship with the value, some buyers consider it’s finest to purchase throughout excessive concern and promote throughout excessive greed.
Followers of this concept are referred to as “contrarian investors,” as they go in opposition to the grain to make their strikes. Warren Buffet‘s well-known quote additionally echoes the identical philosophy: “Be fearful when others are greedy, and greedy when others are fearful.”
Now, here’s a chart that exhibits how the Fear & Greed Index’s worth has modified for the Bitcoin and wider cryptocurrency market over the past yr:
The worth of the metric appears to have plunged throughout the previous day | Source: Alternative
As proven within the above graph, the Bitcoin Fear & Greed Index had principally been contained in the concern and excessive concern territory throughout the bear market, however with the rally that began this yr, the indicator sharply recovered to impartial values.
Since then, the metric has been capable of preserve at or above impartial values, apart from a short lived plunge again contained in the concern zone final month. However, prior to now few weeks, the market had been capable of maintain a relentless sentiment of greed because the asset’s value rode a robust bullish momentum.
Over the final couple of days, the investor mentality has taken successful following the plummet within the BTC value beneath first the $30,000 degree, and now the $29,000 degree.
Currently, the metric nonetheless has a price of 52, which means that the sentiment continues to be not far off from the greed territory. However, this shift in the direction of neutrality continues to be notable, because the final time the indicator had related values was greater than a month in the past.
It now stays to be seen whether or not the market can regain its optimism, or if the decline within the sentiment would proceed within the close to future, and the metric would sink again contained in the concern zone.
BTC Price
At the time of writing, Bitcoin is buying and selling round $28,800, up 5% within the final week.
Looks like BTC has plummeted | Source: BTCUSD on TradingView
Featured picture from Kanchanara on Unsplash.com, charts from TradingView.com, Alternative.me
