Data shows the Bitcoin market sentiment has returned to the extreme greed region following the cryptocurrency’s surge above $99,000.
Bitcoin Fear & Greed Index Is Back Inside ‘Extreme Greed’
The “Fear & Greed Index” refers to an indicator that keeps track of the average sentiment that’s present among traders in the Bitcoin and wider cryptocurrency markets.
The index uses a numeric scale that runs from zero to hundred for representing the market situation. All values above the 53 mark correspond to a sentiment of greed, while those below 47 imply fear. The territory in-between the two represents a net neutral mentality.
Besides these three main sentiments, there are also two special zones called the extreme greed and extreme fear. The former occurs above 75 and the latter below 25.
Here is how the latest value of the Bitcoin Fear & Greed Index has looked:
The value of the metric appears to be 76 at the moment | Source: Alternative
As is visible above, the indicator is sitting at 76, which suggests the investors as a whole share a sentiment of extreme greed. Today’s value is a change from how it has been recently, as the below chart shows.
The trend in the Fear & Greed Index over the past year | Source: Alternative
Bitcoin was inside the extreme greed territory last month when the journey to new all-time highs took place, but the price decline that followed meant a cooldown in investor enthusiasm.
The latest foray into the zone has come as the cryptocurrency has been putting together another surge, with its price managing to break above the $102,000 level so far.
Historically, the extreme sentiments have held quite the significance for Bitcoin and other digital assets, as tops and bottoms in the market have often occurred while the investors have held these sentiments.
The coins tend to move contrary to crowd opinion, however, meaning an overly bullish sentiment has actually been bearish for the price, while a bearish sentiment bullish.
With the Bitcoin sentiment climbing back into extreme greed, the risk of a top may once again be looming over the asset’s price. So far, though, the Fear & Greed Index has only just entered into the zone, which may leave room for the crowd to get a bit more hyped before the contrarian effect strikes.
In some other news, the Bitcoin demand from the retail investors has observed a sharp plunge recently, as CryptoQuant author Axel Adler Jr has pointed out in an X post.
Looks like the retail investors have severely reduced their volume | Source: @AxelAdlerJr on X
Retail investors are the smallest of entities in the market, so their transactions usually don’t tend to be too large. As such, the transaction volume for the transfers valued at less than $10,000 could be used to determine the activity related to this cohort.
From the chart, it’s apparent that the 30-day change in this Bitcoin volume has just gone through its largest negative spike since the middle of 2021.
BTC Price
At the time of writing, Bitcoin is trading around $102,000, up 8% over the last week.
The price of the coin seems to have registered a large jump during the past day | Source: BTCUSDT on TradingView
