As the cryptocurrency price rises, data shows that the Bitcoin fear-and-greed index is at its highest since November peak.
Bitcoin Fear And Greed Index Now Points At “Greed”
According to the Arcane Research weekly report, BTC fear and anxiety index rose to greed sentiment values this week.
The “fear and greed index” is an indicator that tells us about the current general market sentiment among Bitcoin investors.
For this purpose, the metric employs a numeric scale which can range from one up to 100. Investors are greedy when they see values higher than fifty. However, values below fifty signify a fearful market.
Extreme greed and extreme fear are represented by values above 75 and 25 respectively.
Below is a chart which shows how the Bitcoin Fear and Greed Index has changed over the past 12 months.
It looks like the indicator's value has risen recently. Source: Arcane Research's The Weekly update - Week 12, 2022| Source: Arcane Research's The Weekly Update - Week 12, 2022
You can see that Bitcoin fear and greed has increased sharply in the past week, as you can see from the graph. This indicator has now reached 56 which indicates that the market is becoming greedy.
The metric’s current value is greater than any time in 2022, but it is also the highest ever since November last year.
Glassnode’s RHODL Ratio May Suggest Bitcoin Market Is Near Capitulation| Glassnode’s RHODL Ratio May Suggest Bitcoin Market Is Near Capitulation
Bitcoin’s peaks tend to be at times when the sentiment is one of extreme greed. Bottoms form during periods of fear.
There is a popular trading technique called “contrarian investing” that makes use of this fact. This methodology suggests traders that extreme fear is the ideal time to purchase, and extreme greed is the right time to sell.
Bitcoin Weekly Momentum Flips Bullish For First Time In 2022: What Data Says| Bitcoin Weekly Momentum Flips Bullish For First Time In 2022: What Data Says
This famous quote by Warren Buffet sums up this philosophy: “Be fearful when others are greedy, and greedy when others are fearful.”
According to contrarian investors’ thinking, market sentiment that is turning greedy could be an indicator you need to become fearful.
BTC price
At the time of writing, Bitcoin’s price floats around $47.3k, up 12% in the last seven days. In the last month, crypto gained 26%.
Below is a chart showing the change in coin price over the past five days.
Bitcoin prices seem to have risen over the past days. Source: BTCUSD at TradingView| Source: BTCUSD on TradingView
Unsplash.com's featured image. Charts by TradingView.com. Arcane Research:
