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Data shows that the Bitcoin Fear & Greed Index has returned to the neutral area, a sign that investors lose optimism.
Bitcoin Fear & Greed Index has been brought back to neutral
The “Fear & Greed Index” refers to an indicator created by Alternative That tells us about the average sentiment that is present among the traders in the Bitcoin and wider cryptocurrency markets.
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The index uses the data of these five factors to determine the trader mentality: trade volume, dominance of market capitalization, volatility, social media sentiment and google trends.
The indicator represents the calculated sentiment as a score between zero and one hundred. Values above the 54 figure correspond to the dominance of greed in the market, while under 46 for the presence of fear among investors. All values between these cutoffs correlate with a net neutral sentiment.
This is now how the mood in the Bitcoin market is like at the moment according to the Fear & Greed Index:
As is visible above, the Bitcoin Fear & Greed Index currently has a value of 54, which suggests that the investors have a neutral sentiment, although one that is exactly on the edge to turn into greed.
The recent neutral mentality in the sector came after a phase of greed among traders, as the graph below shows.
As shown in the graph, the Bitcoin Fear & Greed Index spoke earlier in the month to a peak of 72, because the price of the active investors hope that the consolidation phase could end.
However, since the recovery rally has been extended and the coin has returned to its reach, the optimism among investors is predictably blurred. However, if history is over, this development may not be that bad for the cryptocurrency.
In general, digital asset markets tend to move in a way that is contrary to the expectations of the majority. The chance that such an opposite movement takes place goes up how extreme the crowd becomes.
In addition to the three core feelings, two special regions are known as the extreme fear (below 25) and extreme greed (above 75). These zones are where the chance of an opposite movement in the past has been the strongest, where tops and soils often take shape.
Although the market sentiment has recently seen only a reset to neutral territory, the fact that the investors are no longer greedy can still be positive for Bitcoin and other cryptocurrencies. There have been many cases in the past where a dip in the neutral zone was enough to regain the bull run to regain the momentum.
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However, it can only be seen how the prices of BTC and others would develop in the coming days.
BTC price
At the time of writing, Bitcoin floats around $ 102,800, a decrease of more than 2% in the last seven days.
Featured image of Dall-E, alternative.me, Chart van TradingView.com