Fear and Greed Returns to Neutral as Bitcoin Struggles
The fear and greed index, which considers parameters such as volatility, market momentum, social media sentiment, dominance, and trends, has sharply declined to the neutral zone. This is due to the recent sharp correction in the price of Bitcoin following the approval of spot Bitcoin exchange-traded funds (ETFs).
Market Pullback After Approval
When the fear and greed index is above 75, indicating extreme greed, there is usually a high chance of a market pullback. Last week, the index was on the verge of extreme greed as anticipation for the approval of spot Bitcoin ETFs grew. However, since the approval, market participants have treated it as a “sell the news” event.
Blue-Chip Crypto Assets at Neutral Levels
As a result of the market correction, funding rates for blue-chip crypto assets like Bitcoin, Ethereum, and Solana have fallen to neutral levels. This suggests that greedy sentiments have diminished in the crypto markets.
Community Anticipates Pullback
Industry experts and the community are now expecting a pullback to lower levels. Some believe that Bitcoin will remain range-bound between $38,000 and $45,000 in the coming months. Others see this as an opportunity for accumulation in the market.
Hot Take: Upside Returns Better Than Downside Risks
While the crypto fear and greed index hovers around neutral territory, some users believe that upside returns outweigh downside risks. They consider a drop towards $38,000 as a strong buy zone for Bitcoin.
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