According to CryptoPotato, the Bitcoin Fear and Greed Index shows that the sentiment of cryptocurrency investors has turned neutral as BTC fell below $57,000. Data from Alternative.me shows that the Fear and Greed Index reached 54 for the first time in three months, indicating that cryptocurrency investors are neither fearful nor greedy under current market conditions. The last time investors maintained a neutral sentiment was on January 28, 2024, when the price of BTC was around $42,000.
However, the conditions of current market sentiment are different. Bitcoin has fallen from its all-time high of $73,700 reached in mid-March. The cryptocurrency has experienced high volatility over the past few weeks, which got worse yesterday and continued to slide today.
It is reported that the Fear and Greed Index determines market sentiment by analyzing several factors including Bitcoin's dominance, social media, market momentum, trends and volatility. On a scale of 0 to 100, 0 indicates extreme fear, 50 indicates neutrality, and 100 indicates extreme greed. In the past few weeks, investor sentiment has been hovering between greed, occasionally surging to extreme greed. Alternative.me revealed that yesterday's sentiment was 67 and last week it was 72, indicating that investors have been greedy. Market participants were more greedy last month, as the index surged to 79, a number that represents extreme greed.
It remains to be seen which direction the crypto market will go in the short term: fear or greed. Although there may be further corrections, analysts expect long-term price gains, which they have been seeing after Bitcoinâs halving. Meanwhile, Bitcoinâs recent decline has seen it fall below key support levels, with crypto markets losing more than $200 billion. In about 36 hours, BTC fell from $64,100 to $56,700, a drop of more than 11%, dragging down other altcoins and the entire crypto market. At the time of writing, BTC is still falling but has recovered slightly and is trading at $57,200. Analysts believe that BTC may fall further before resuming its rally, as deeper corrections have been seen in previous bull cycles.
