Bitcoin Fear and Greed Index returns to normal levels 📉

Bitcoin Fear and Greed Index: Returning to Normalcy

The Fear and Greed Index of Bitcoin is slowly returning to normal levels, measuring the sentiment in the market for Bitcoin. Recently, it dropped below 60 which indicates a shift in the sentiment among investors.

Anomalous Values of the Fear and Greed Index at the Beginning of 2024

At the start of 2024, the Fear and Greed Index of Bitcoin was around 70 points. This index ranges from 0 to 100, with 0 signifying extreme fear and 100 representing maximum greed or enthusiasm. The value of 70 in early is quite high, especially considering the ongoing bull run at that time.

The values continued to range between 70 and 80 after the bull run halted in mid-, which seemed abnormal for a period of sideways movement. This could be attributed to the high anticipation surrounding the upcoming halving event.

Returning to Normalcy in the Fear and Greed Index of Bitcoin

Changes started to occur on April 13, following the drop in Bitcoin’s price below $65,000. The index reflects the market performance on the previous day, so the drop in value on 13th April indicated the sentiment on the 12th.

Despite the decline in BTC price to $61,000 the next day, the index remained above 70. By April 15, it even increased to 74, an unusual level for a period of decline.

This suggested that the market sentiment remained positive until the price drop on the same day, indicating a shift in sentiment as the market realized the ongoing retracement.

The Persistently Elevated Levels

The current value of the Fear and Greed Index at 57 is still relatively high, remaining above the neutral level of 50 points. This is noteworthy as the index has maintained relatively high levels for over 15 months.

Since October 2023, the index has consistently been in positive territory, possibly due to Bitcoin’s price remaining above $27,000, where it had been sideways for an extended period.

The Ongoing Retracement

Given the remarkable price performance of Bitcoin at the beginning of 2024, many anticipated a post-halcoinning retracement. Although the halving event has not yet directy occurred, the retracement seems to be underway.

It is likely that the markets anticipated this retracement, with the Fear and Greed Index reflecting this sentiment shift. The volatility in Bitcoin’s price is a common occurrence in the market, and investors may be adapting to these fluctuations.

This indicates that the market is adjusting to the volatile nature of Bitcoin’s price, with the Fear and Greed Index providing insights into the shifting sentiment among investors.

Hot Take: Reflecting on Market Sentiment

As an investor, it is crucial to monitor market sentiment indicators like the Fear and Greed Index to gauge the prevailing mood among market participants. By understanding these shifts, you can make more informed decisions regarding your investments in the ever-changing landscape of cryptocurrency.