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The Crypto Fear and Greed Index has surged to levels not observed since November 2021, when bitcoin (BTC) reached an all-time peak exceeding $69,000.
As per crypto data provider Alternative.me, the Fear and Greed Index currently stands at 71, reflecting a sentiment of greed among market participants.
BTC Investors Have Become Greedy
The Crypto Fear and Greed Index serves as a widely used tool for gauging investor sentiment within the digital asset market. It is based on two key assumptions: extreme fear suggests that investors are overly anxious, potentially signaling a buying opportunity, while high levels of greed indicate a rising market that may be due for a correction, prompting investors to exercise caution.
This index employs various metrics, such as volatility, market momentum, social media activity, surveys, Bitcoin’s market dominance, and trends, to assess the prevailing market sentiment on a scale from 0 to 100, where 0 represents extreme fear, 50 denotes neutrality, and 100 signifies extreme greed.
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During bullish market conditions, individuals often become greedy, and the fear of missing out (FOMO) can lead to hasty buying and selling of crypto assets. With the Fear and Greed Index currently at 71, it indicates that investors are increasingly optimistic about the future of cryptocurrencies, particularly BTC.
What Does This Mean?
On October 24, BTC experienced its most significant single-day increase in over a year, rising 14% to the $35,000 mark. This surge was linked to the anticipation surrounding the potential approval of BlackRock’s spot Bitcoin exchange-traded fund (ETF) application by the U.S. Securities and Exchange Commission (SEC).
The leading digital currency rose from $28,000 to $30,000 on October 16, although this rally was fueled by unverified reports regarding the SEC’s approval of BlackRock’s spot Bitcoin ETF proposal.
While BTC’s price has since pulled back and is currently around the $34,400 range, the cryptocurrency has achieved approximately 28% growth in less than two weeks. The current greed ranking reflects a 24-point increase from the October 16 figure of 47 and a five-point rise from 66 on October 24.
This greed ranking suggests a bullish outlook and corresponds with recent perspectives that the bear market may have concluded, with BTC and other cryptocurrencies likely to maintain their strong performance.
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