The Cryptocurrency Fear and Greed Index Returns to Neutral
The fear and greed index in the cryptocurrency market has reverted back to a neutral state after experiencing a surge last week. This shift occurred shortly after the approval of the first spot Bitcoin ETFs in the United States, causing the index to drop to levels last seen in October 2023.
Bitcoin Market Sentiment at its Lowest
According to Alternative.me’s index, Bitcoin currently has a market sentiment score of 52 out of 100, marking its lowest point since October 19 of the previous year when Bitcoin was trading at around $31,000 on average per day.
Extreme Greed Turns to Neutral
Moments ago, the fear and greed index had reached an “extreme greed” reading of 76 as investors eagerly awaited the approval of spot Bitcoin ETFs. However, it has now returned to a more balanced state.
An Indicator of Market Sentiments
The fear and greed index serves as a numerical representation of the emotions and sentiments prevailing in the crypto market. It analyzes six key market indicators, including volatility, market momentum and volume, social network activity, survey data, BTC dominance, and trends.
Spot Bitcoin ETF Approvals
On January 10th, the U.S. Securities and Exchange Commission (SEC) announced its approval of 11 applications for spot exchange-traded funds based on Bitcoin. The eligible issuers include Bitwise, Grayscale, Hashdex, BlackRock, Valkyrie, BZX, Invesco, VanEck, WisdomTree, Fidelity, and Franklin Templeton.
False SEC Message Causes Price Fluctuations
Prior to the official approval news, a fake message claiming that the SEC had already given its approval was circulated. The regulator clarified that their account had been compromised, resulting in significant fluctuations in the price of Bitcoin.
Hot Take: Uncertainty Looms over Crypto Market Sentiments
The recent return of the fear and greed index to neutral levels highlights the uncertainty surrounding cryptocurrency market sentiments. With the approval of spot Bitcoin ETFs causing both extreme greed and subsequent decline, investors must navigate these shifting emotions while making informed decisions. As the crypto market continues to evolve rapidly, it is crucial to monitor indicators like the fear and greed index to gain valuable insights into prevailing sentiments and potentially anticipate future trends.
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