Data shows the Bitcoin trader sentiment has remained neutral recently, suggesting the market is currently not sure about a bullish outcome.
Bitcoin Price Has Taken To Sideways Movement Recently
After showing a strong recovery surge last week, Bitcoin has hit a bit of a pause in the past few days, as the cryptocurrency’s price has been unable to pick a direction.
The below chart shows how the asset’s performance has looked like over the last month:
The price of the coin has seen notable growth over the last few weeks | Source: BTCUSDT on TradingView
Despite the slowdown, Bitcoin is still carrying notable weekly profits of around 8%. The sideways movement, though, does seem to have had an effect on the investor morale.
Fear & Greed Index Is Currently Signaling A Neutral Market
The “Fear & Greed Index” is an indicator devised by Alternative that tells us about the sentiment of the average trader in the Bitcoin and the wider cryptocurrency markets. The index uses the following five factors to determine the sentiment: volatility, trading volume, social media sentiment, market cap dominance, and Google Trends. Once found, the indicator represents it as a score lying between zero and hundred.
When the value of the metric is greater than 53, it means the investors as a whole share a sentiment of greed. Similarly, it being under 47 suggests fear being dominant in the market.
The region in-between these two cutoffs naturally corresponds to the neutral mentality. It would appear that the Bitcoin investor sentiment is currently in this third category, as the Fear & Greed Index has a value of 50.
The latest value of the Fear & Greed Index | Source: Alternative
Just after the recent rally, the indicator had hit a value of 54, suggesting that the investors had started to become slightly bullish on Bitcoin and other cryptocurrencies.
This foray into the greed territory had been the index’s first since late August, but as the latest value of the indicator suggests, this renewed market optimism couldn’t maintain. The reason behind the sentiment degrading into the neutral region is naturally the slowdown of the bullish push in the asset’s price.
Historically, the BTC price has tended to move in the direction opposite to what the crowd is expecting, with the probability of such a contrary move going up the more sure the investors become.
The Fear & Greed Index has two special zones called the extreme fear (below 25) and the extreme greed (above 75) where this likelihood could be assumed to be the strongest.
At present, though, the market sentiment is as far away from either of the zones as it can be, so it’s hard to say where Bitcoin and others might go next. Assuming that the sector is still in a bull market, however, any hesitancy from the investors can be a positive sign, as it suggests there isn’t any hype yet to impede any rallies.
It now remains to be seen how the price of Bitcoin, and hence, the market sentiment, will develop from here on out.