Bitcoin Sentiment Enters Danger Zone: Investors Now Extremely Greedy
2024年11月8日 - 5:30PM
NEWSBTC
Data shows the Bitcoin investor sentiment has entered extreme greed
territory following the asset’s surge to a new all-time high (ATH).
Bitcoin Fear & Greed Index Is Now Pointing At ‘Extreme Greed’
The “Fear & Greed Index” is an indicator created by Alternative
that tells us about the average sentiment among the traders in the
Bitcoin and the wider cryptocurrency sectors. This index represents
the sentiment as a score between zero and hundred. To calculate the
score, the metric uses data from the following five factors:
volatility, trading volume, market cap dominance, social media
sentiment, and Google Trends. When the indicator’s value is greater
than 53, it means the investors share a sentiment of greed right
now. On the other hand, the metric being below 47 suggests the
market is currently observing fear. Naturally, the index between
these two regions implies a net neutral mentality. Related Reading:
Dogecoin Descending Triangle Could Hint At Next Destination For
DOGE Besides these three core sentiments, there are two special
zones: extreme greed and fear. The former occurs at values above
75, while the latter is under 25. Now, here is what the Bitcoin
Fear & Greed Index is like right now: As is visible above, the
indicator is at a value of 77, which suggests the traders in the
sector are currently holding a sentiment of extreme greed. This is
a change from yesterday when the market was still inside the normal
greed region. Here is a chart that shows how the index’s value has
changed over the past year: Historically, the extreme sentiments
have proven significant for Bitcoin, as major price tops and
bottoms in the asset have tended to occur inside these zones. Thus,
the relationship between sentiment and price has been an inverse
one, however, meaning that extreme greed has led to tops, while
extreme fear has paved the way for bottoms. From the above graph,
it’s apparent that the Fear & Greed Index had surged high into
the extreme greed territory when Bitcoin had topped out in the
first quarter of this year. Related Reading: Bitcoin Records
$75,000 All-Time High: Here’s If BTC Is ‘Overheated’ Now It’s
possible that, with the market once again becoming too hyped about
the cryptocurrency after the latest all-time high (ATH) break,
another top could form for BTC. Generally, however, major tops only
occur when the index hits particularly high levels. The top above,
for instance, took place alongside a value of 88. Thus, it’s
possible that sentiment could still have room to heat up, before
the rally hits a major obstacle. BTC Price At the time of writing,
Bitcoin is floating around $75,900, up 8% over the last seven days.
Featured image from Dall-E, Alternative.me, chart from
TradingView.com
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