As Bitcoin hit a record high of more than $68,000, the cryptocurrency market sentiment turned into extreme greed. This emotional period has led to corrections in the past, but will the trend be similar this time?
Bitcoin Fear and Greed Index starts to point towards extreme greed
According to the latest weekly report Arcane Research, The Fear and Greed Index now points to extreme greed, because BTC created a new ATH.
this Fear and Greed Index It is a Bitcoin indicator that shows the current crypto market sentiment. This indicator uses a numeric scale ranging from zero to one hundred to show emotions.
A value below 50 indicates that the market is currently sharing fear, while a value above 50 means that investors are becoming greedy.
If the indicator value is higher than 75 or lower than 25, it means that the market is showing extreme greed or extreme fear, respectively.
Periods with extreme values indicate that the market may soon reverse. The correction may follow the value of extreme greed, and the uptrend changes may come from extremely fearful markets.
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This is where the current Bitcoin Fear and Greed Index needle points:
Looks like the crypto market is seriously greedy at the moment | Source: The Arcane Research Weekly Update - Week 44
As shown in the table above, the current market sentiment is extremely greedy. This is an increase from last week because the value at the time was in the normal greedy zone. This change is caused by the BTC reaching the new ATH.
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The market was also greedy last month. The figure below shows the trend of indicator values in the past year.
Crypto market sentiment has been in the greed territory for a while now | Source: The Arcane Research Weekly Update Week 44
The market has now been experiencing extreme greed or greed for one month in a row.The last time this happened was from August to September, and thereafter El Salvador day crash.
This period of greed may suffer a similar fate. However, the report pointed out that in the spring, the value of this indicator has remained high for a long period of time. Therefore, a similar trend may appear in the coming weeks.
At the time of writing, Bitcoin price Floating around US$66,500, it has risen by 4% in the past 7 days. In the past month, the value of cryptocurrencies has risen by 20%.
This is a graph showing the trend of token value in the past five days:
BTC's price made a new ATH today, but has since come down a bit | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research