Bitcoin Sentiment Nearly Back To Neutral—Green Sign For Rally?

Keshav Verma

1 month ago

3 mins read

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Data shows the Bitcoin Fear & Greed Index is close to the neutral territory again, a sign that market sentiment has seen a cooldown.

Bitcoin Fear & Greed Index Is Now Close To Edge Of Greed Territory

The “Fear & Greed Index” is an indicator created by Alternative that tells us about the sentiment held by the average trader in the Bitcoin and wider cryptocurrency markets.

The index determines the market mentality using the data of five factors: trading volume, market cap dominance, social media sentiment, volatility, and Google Trends.

To determine this sentiment, the metric makes use of a numeric scale running from zero to hundred. All values below the 47 mark correspond to a fearful market, while those above 53 imply greed among the investors. The index being between these cutoffs naturally suggests a net neutral mentality.

Besides these three main sentiments, there are also two special ones called the extreme fear and extreme greed. The former occurs under 25 and the latter above 75.

Now, here is how the Bitcoin Fear & Greed Index currently looks:

Bitcoin Greed — The metric has a value of 56 | Source: Alternative

As is visible above, the Bitcoin Fear & Greed Index has a value of 56 at the moment, which means the investors as a whole share a sentiment of greed. The level of greed is only slight, however, as the metric is just three units above the neutral zone.

This wasn’t the case just a week ago, when the indicator hit the 72 mark, signifying the crowd was very close to becoming extremely greedy. The uplift in sentiment earlier was a result of the asset’s recovery rally, but with the price surge stalling recently, it seems the investor optimism has waned.

Below is a chart that shows how the indicator’s value has developed recently.

The trend in the BTC Fear & Greed Index over the past twelve months | Source: Alternative

If Bitcoin’s sideways action continues in the coming days, it’s possible that sentiment would decline into the neutral zone next. This development may not actually be so bad for the cryptocurrency.

Historically, BTC and other digital assets have tended to move in a direction that’s opposite to the crowd’s expectations. The probability of such a contrary move occurring usually grows the more sure the investors become of something. This likelihood is naturally the strongest in the extreme zones, so these regions are where tops and bottoms generally occur for the market.

While BTC is in neither extreme territory right now, the fact that investor sentiment has calmed down to nearly the neutral zone may at least make sure that greed wouldn’t become the end of the price rally. It only remains to be seen how things play out for Bitcoin now.

BTC Price

At the time of writing, Bitcoin is floating around $93,800, down over 1% in the last 24 hours.

Bitcoin Price Chart — The trend in the BTC price during the last five days | Source: BTCUSDT on TradingView

Featured image from Dall-E, Alternative.me, chart from TradingView.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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