Crypto Fear And Greed Turns Neutral, What’s Next?

Reynaldo Marquez

3 years ago

2 mins read

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Bitcoin and the crypto market have seen downside price action on shorter timeframes. The first crypto by market cap has been trading in a tight range this week with sudden spikes in volatility impacting smaller cryptocurrencies.

Momentum seems to be favoring the bulls as Ethereum (ETH), Solana (SOL), Terra (LUNA), keep their gains as Bitcoin hints at further lows. SOL’s price records a 22% profit which makes it the best performing asset in the crypto top 10.

At the time of writing, the crypto total market stands above the important mark of $2 trillion.

Crypto Total Market Cap — Crypto total market cap trends to the upside since Marc 2022 on the daily chart. Source: Tradingview

Per a recent report from Arcane Research, crypto market participants are at a crossroads. The Fear and Greed index is currently at neutral ground after it saw a major spike from below.

As seen below, the research firm records the metric at 53 which is slightly above Greed levels. As Bitcoin and other large cryptocurrencies move sideways, so has this metric.

Crypto Fear and Greed — Source: Arcane Research

Since December 2021, market participants seem to be leaning more to the fearful side with two separate times when the index stood below Extreme Fear. Sudden moves into either extreme usually signal a price reversal.

The chart above fits this thesis as long periods of fearfulness are followed by a period of greed. This time, as market participants feel greed, Arcane Research hinted at a possible new reversal:

The Fear and Greed Index has stabilized at neutral levels, fluctuating around 50 throughout the week, suggesting a reasonably balanced market sentiment. The index has now trailed around 50 for ten days. The last time this happened, market sentiment plummeted to fearful terrain shortly after.

Additional data from Material Indicators seem to support a bearish thesis. At its current levels, Bitcoin has a lot of resistance. There are over $30 million in asks orders with little support below.

The Factors That Could Play In Favor Of The Crypto Greedy

Although the crypto market could continue to outperform the largest crypto, its short-term performance will impact the altcoin market. The high amount of asks order suggests downside, as mentioned, but there are bullish factors currently at play.

As noted by Yuya Hasegawa, an analyst at Bitbank, The price of Bitcoin has benefited from the United Kingdom Treasury announcement. The financial institution seems to be warming up to crypto as it plans to embrace NFT and stablecoins to improve its payment system.

In that sense, the former EU member hints at a friendlier stand toward digital assets. If the new European regulation on this asset class turns hostile, as it seems to be, the U.K. could become the region’s alternative to maintain its operations.

In addition, the crypto market seems to be benefiting from a relief in tech stock companies’ prices. These companies rallied, as the analyst noted after Elon Musk announced his acquisition of a 10% stake at social media company Twitter.

Finally, Hasegawa believes the Bitcoin Miami Conference could offer Bitcoin and the crypto market some short-term support. The event is set to start tomorrow Wednesday and could see important bullish announcements like last year.

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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