A Surge in Bullish Sentiment: Crypto Fear & Greed Index Hits Highest Level Since 2021
A key gauge of investor sentiment, the Crypto Fear & Greed Index, currently signals strong bullish sentiment and increased risk appetite among investors. The index surged to 79, marking its highest level since November 2021 when Bitcoin soared to an all-time high above $69,000.
The Crypto Fear & Greed Index ranges from 0 to 100 and analyzes market sentiment for Bitcoin and other top cryptocurrencies. It considers metrics like market momentum, volatility, volume, and social media activity.
Extreme Greed: What It Means for Bitcoin
Readings between 50 and 74 mean “greed,” while above 75 is “extreme greed.” The higher the number, the more confident investors are about Bitcoin. As of Tuesday, the index showed extreme greed, hinting at a possible market correction. Values below 50 typically indicate “fear” or a cautious sentiment among investors.
Analyst Highlights How Today’s ‘Extreme Greed’ Differs from 2021
The jump in the Crypto Fear & Greed Index comes as Bitcoin surged past $50,000 on Tuesday due to increased investments from spot Bitcoin exchange-traded funds (ETFs). The cryptocurrency market grew by over 3.5% in just 24 hours.
FxPro senior market analyst Alex Kuptsikevich notes that while the current Fear and Greed Index mirrors previous highs seen in late 2021, there are differences in the current scenario. This marks the first spike into ‘Extreme Greed’ after the bear market, similar to the early FOMO phase in mid-2020 that preceded a year-long rally.
Crypto Fund Investments on the Rise
Investment momentum in new issuers is looking strong. CoinShares reported a substantial increase of $1.1 billion in crypto fund investments last week, following a $0.7 billion inflow the previous week.
Bitcoin saw a surge of $1.08 billion in weekly investments, while Ethereum, Cardano, and Solana also experienced increases. BlackRock and Fidelity’s spot Bitcoin ETFs have entered the ranks of the top 10 funds with the greatest inflows in January.
So far this year, crypto funds have experienced inflows totaling $2.7 billion, bringing total assets under management to $59 billion — the highest level since the beginning of 2022.
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