The latest Bitcoin and crypto market crash has seen costs plunge into the purple throughout the board. As a consequence, sentiment amongst crypto traders has plunged quickly and this has prompted the Fear & Greed Index to plunge into the Extreme Fear territory. This means that traders are much less prone to put cash into the market, however it might additionally include excellent news for the market.
Fear & Greed Index Sitting At Extreme Greed
The Bitcoin Fear & Greed Index is among the greatest indicators of telling how traders are feeling towards the market at any time. This index makes use of a scale of 1-100, representing sentiments ranging throughout Fear, Extreme Fear, Neutral, Greed, and Extreme Greed. Each of those can present how traders are feeling and might be a inform for the place the Bitcoin value might be headed subsequent from right here.
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Usually, when the Fear & Greed Index is sitting on both excessive, it might imply that the worth is about to swing in the wrong way. So, for instance, the Bitcoin Fear & Greed Index is in Extreme Greed might recommend that the worth is about to fall, and vice versa.
This pattern can be constructive for the Bitcoin value proper now because the Fear & Greed Index has fallen into the Extreme Greed territory. As of Friday, the Fear & Greed Index had fallen as little as 22, which put it firmly within the Extreme Fear territory.
Going by the Bitcoin value having an inclination to get well when the index is within the purple, it might imply that the price is reaching a bottom. An instance of that is when the Bitcoin Fear & Greed Index fell to twenty in August, earlier than the crypto market seeing a fast rebound. If that occurs right here, the Bitcoin value might be on the verge of a restoration.
Bitcoin Rebound Not Likely In September
While the Fear & Greed Index sitting within the Extreme Fear territory might level in the direction of a backside, the rebound could not materialize for some time. This is as a result of the month of September has traditionally been very bearish and expectations are that this month is not going to be completely different.
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Veteran analyst Benjamin Cowen outlined this in a put up on X (previously Twitter), revealing that this month is already on observe with earlier September months. So far, the Bitcoin price has already fallen 8.16%, and “If BTC closes the month at this price, it would be a fairly typical September,” the analyst explains.
The avg. return of #BTC in September is -6.3%
So far this month, BTC’s return is already -8.16%.
The solely time within the final 5 years the place the Sep. month-to-month return was worse than this was 2019 (-13.91%)
If BTC closes the month at this value, it might be a reasonably typical September pic.twitter.com/bZ9cRIl9OU
— Benjamin Cowen (@intocryptoverse) September 6, 2024
However, the month of October is often bullish, so if this pattern continues, then September is prone to finish within the purple. But then when October rolls round, prices are expected to pick back up.
Featured picture created with Dall.E, chart from Tradingview.com
