The Bitcoin Fear & Greed Index has risen to its highest stage in nearly three years, hitting Extreme Greed at rocket velocity. Using previous efficiency and indicators, it’s potential to infer the place the BTC price is headed subsequent after reaching this new milestone.
Bitcoin Fear & Greed Index At New 2-Year High
The Bitcoin Fear & Greed Index is a measure of investor sentiment and the way they’re trying on the market. This might help to determine if buyers are presently placing cash into the market or if they’re taking cash out of it.
There are 5 main classes throughout the Fear & Greed Index, together with Extreme Fear, Fear, Neutral, Greed, and Extreme Greed. The index is ranked on a scale of 0-100, with a variety of numbers representing a class of investor sentiment.
Extreme Fear is the bottom on this scale, which ranges from 0 to 25. Then, from 26 to 46, now we have the Fear. Both of those classes point out an unwillingness of investors to enter the market and have typically introduced as the most effective time to spend money on crypto.
Next on the dimensions is 47 to 52, which represents the Neutral territory. Then 53 to 75 is Greed when buyers are starting to really feel assured out there. Finally, 76 to 100 is Extreme Greed, which represents peak bullishness. As the Bitcoin Fear & Greed Index currently sits at 79, which is Extreme Greed, it may carry some implications for the market.
BTC value pushes towards $57,000 | Source: BTCUSD on Tradingview.com
Extreme Greed Marks The Top?
Just because the Bitcoin Fear & Greed Index may be useful in figuring out what is an effective time to purchase, it could actually additionally present pointers for when a market high may be in. Looking by the historic efficiency of the crypto market in comparison with the Fear & Greed Index, we see a persistent correlation between peak euphoria and the market high.
The most up-to-date instance of that is November 2021, when the index’s rating climbed to as excessive as 84, simply 5 factors shy of the present 79 rating. At this level, the price of Bitcoin had risen to $69,000 earlier than assembly resistance, which it is going to ultimately succumb to,
In the next days, sentiment would start turning, as did the price of Bitcoin. The same sample was additionally seen in February and March 2021 when the index hit a excessive of 94. The subsequent few days noticed curiosity taper off, marking the height at that specific level.
If the identical sample had been to be repeated on this state of affairs, then Bitcoin could have another few days of runway earlier than it blows off high. Presently, the cryptocurrency is already seeing important resistance at $57,000, which may recommend that the highest is close to.
Disclaimer: The article is supplied for academic functions solely. It doesn’t characterize the opinions of NewsBTC on whether or not to purchase, promote or maintain any investments and naturally investing carries dangers. You are suggested to conduct your personal analysis earlier than making any funding selections. Use data supplied on this web site solely at your personal threat.
