The Bitcoin Greed and Fear Index from Matrixport, a crypto services provider, which has a solid track record of signaling trend reversals, is indicating a bullish revival in Bitcoin (BTC).
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The index measures investor sentiment, and readings above 90% signal greed or excessive optimism, while readings below 10% represent extreme fear or pessimism. These indicators are widely followed because excessive optimism or greed is often seen at market tops, while fear is seen at market bottoms.
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Data shows that the Matrixport index recently rose from 30% to 60%, after bottoming out after falling from more than 90% in July.
"The index appears to have bottomed as the daily (gray) signal is projecting bullish pressure. After four weeks of consolidation, this indicator is tactically bullish and Bitcoin prices could resume the uptrend," wrote Markus Thielen, head of research and strategy at Matrixport, in a note to clients on Thursday.
In the analysis you can see how the tops and bottoms in the index and the index's 21-day simple moving average (SMA) have historically coincided with bullish and bearish reversals in the price of bitcoin. The 21-day SMA now shows signs of having bottomed, supporting the argument for renewed bullish volatility in bitcoin.
Bitcoin has been rudderless for some time, trading between $28,000 and $30,000 for more than two weeks, amid volatility in traditional markets and expectations of interest rate cuts by the Federal Reserve early next year. .
The U.S. Securities and Exchange Commission's (SEC) pending decision on whether to approve an exchange-traded fund (ETF) is a crucial catalyst for price volatility, according to some analysts.
