Bitcoin market sentiment has now skewed completely into the positive. The Fear & Greed Index had spent one of its longest stretch in “extreme fear.” Market sentiments were in the negative. This was due to the market crash that had occurred following the May price rally.
The move of the index into greed could see the crypto market barreling upwards to create new all-time highs. This could mean that the rally could only be just starting. As buy pressures mount, so will the price of crypto surge upwards. And by extension, the price of bitcoin.
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Bitcoin price had a long stretch of low prices that speculations were that the market had gone into a bear market. But recent price movements show that this is not the case. If anything, the market seems to have gone into another bull run. With the price of BTC hitting over $45K for the first time since the price had hit its all-time high.
Trends continue to show that the price of BTC is only just in the beginning stages of this rally. Bitcoin accumulation patterns now point to the fact that is tremendous buy pressure in the market. This is made evident in the number of coins leaving exchanges compared to the number of coins going into exchanges.
Fear & Greed Index Skews Into Greed
The Fear & Greed Index provides a way to tell how the market in general is feeling about the future of the coins. When the index goes to fear, it means investors are wary of putting their money into the market. This leads to less money coming into the market. Hence, coins lose value following this.
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The recent release of the Fear & Greed Index shows that the market has now moved into the greed territory. While climbing further towards extreme greed. The market has not been in greed since May. So this is a welcome development given the brutal last two months that the market has seen.
Fear & Greed Index moves closer to extreme greed | Source: Fear & Greed Index from Arcane Research
The market had spent last week in the neutral territory. With the possibility of either swinging back into fear or going into greed. The latter won out in the end. Last week’s score was a neutral 48. But this week’s score now sits at 71 in greed. Sitting very close to the line between greed and extreme greed.
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A move into extreme greed would prove that over-confidence has returned to the market. Leading to a highly exuberant market. Although the Fear & Greed Index gives a good reading on market sentiment, it does not give a good reading on price movements. There is no exact science to link greed to market tops. But knowing the general sentiments in the market can help to direct investors on possibilities in the market.
Bitcoin Price Movements
Despite the high Fear & Greed Index reading, the price of bitcoin hasn’t moved much this week. The price had broken $46K on Monday to much anticipation from the market. But there hasn’t been any significant movement up or down since.
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Bitcoin’s price had broken the $46K resistance point. But then had promptly fallen back down into the $45K range. Movement over the past three days shows the price of the asset continues to maintain steady momentum in the $45 price range.
BTC price continues to maintain $45K | Source: BTCUSD on TradingView.com
This lack of movement does not necessarily mean the price is struggling. Sometimes the price has to stay in a certain range before getting enough momentum for another upward rally. Also following a big run-up like the recent one in bitcoin will always see corrections happen along the way. Helping the price to stabilize after moving quickly over a short period of time.
Bitcoin price continues to trade at a little above $45,000. Holding steady at this point and still holding a big part of the market share. With the BTC market dominance sitting at about 47%.
Featured image from Publish0x, chart from TradingView.com