The crypto index of fear and greed still indicates „extreme greed“ despite recent declines in the BTC price.
The index has been indicating „extreme greed“ for more than two months now.
The positive evolution of the sector seems to be the driving force behind the rise in prices and investor confidence.
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The Crypto Fear and Greed Index continues to give a reading of „extreme greed“, despite a decline in the price of Bitcoin. The leading crypt currency fell briefly below $33,700 on January 20.
The Fear and Greed Index has been suggesting „extreme greed“ in the Bitcoin market since early November. However, confidence now seems to be eroding.
The Bitcoin market remains in a state of „Extreme Greed“.
Alternative.me’s Crypto Fear and Greed index has been providing „Extreme Greed“ readings for months now.
The indicator uses volatility, social media engagement, market dominance, and Google trends to gauge investor sentiment towards cryptomoney.
The Crypto index of fear and greed is 78: extreme greediness
Even the significant declines in Bitcoin’s price did not dampen the enthusiasm of traders and investors. At 78/100, the indicator for January 20 was still above the threshold of extreme greed.
At the time of the price reading, the BTC had already dropped more than $1,000 from its previous day’s high of $37,600. The decline continued, with cryptomoney hitting a low of $33,700 on January 20.
Similarly, on January 11, just days after its high of nearly $42,000, Bitcoin dropped to less than $32,000. Despite this decline of approximately 25%, the index still gave an „extreme greed“ reading of 84/100 on January 12.
Not surprisingly, the market remains optimistic even in the face of such declines. Bitcoin surpassed its record price at the beginning of the month after many bullish developments.
Corporate investments, such as MicroStrategy’s, and growing institutional interest, such as MassMutual’s purchases of Bitcoin, highlighted the growing appeal of this asset to a different class of investors. Similarly, JPMorgan, the former opponent of Bitcoin, has taken a bullish turn by predicting that the price of digital assets could exceed $146,000.
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How long will the market remain greedy?
Although Fear and Greed’s crypto index has continued to show a level of „extreme greed“ for the past two and a half months, last week’s results have started to decline.
For the entire month of December and early January, almost all readings were above 90/100. However, since the 25% correction at the beginning of the month, the results have not exceeded 90.
This indicates that the exuberance of the market is waning. The reading on January 20 (78) is the same as the reading on January 13, which is the lowest reading since November 5.
However, some large Bitcoin buyers are taking advantage of the lower prices to buy more. As BeInCrypto reported on January 19, Grayscale bought an additional 16,244 BTCs in a single day.
This follows purchases on January 13 and 14 of more than 4,700 BTCs. Numerous other 24-hour periods were marked by Grayscale purchasing more than the 900 BTCs usually mined in a single day.
The company also reported an increase in institutional interest in the last few months of 2020. Its recent purchase of Bitcoin suggests that it expects this trend to continue.