Bitcoin’s rally propels market mood to levels of extreme greed not seen since 2021
The cryptocurrency market sentiment has taken a sharp turn towards optimism, as indicated by the latest readings from the Crypto Fear and Greed Index.
This tool, renowned for gauging the emotional temperature of the market, soared to a remarkable 79 on February 13, marking its highest point since the record-breaking highs of Bitcoin in mid-November 2021.
At that time, Bitcoin had peaked at $69,000, showcasing the significant correlation between the index’s readings and the cryptocurrency’s price movements.
This surge in the index to the “extreme greed” category, defined as a score above 74, comes on the heels of Bitcoin surpassing the $50,000 milestone on February 12.
This achievement underscores a robust rally that has seen the leading cryptocurrency gain approximately 13% in value since the star
The index’s jump into extreme greed territory is not an isolated event; it previously reached 76 on January 11, coinciding with the buzz surrounding the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States.
This recent spike, however, follows a month after the U.S. spot Bitcoin ETF launch, hinting at a potential easing of short-term selling pressures that typically accompany such significant news.
Cathie Wood, CEO of ARK Invest, had anticipated a sell-the-news reaction following the ETF approval but remained bullish on the long-term impact, particularly highlighting the SEC’s approval as a green light for institutional investors to engage more fully in the Bitcoin market.
The Crypto Fear and Greed Index, which derives its scores from a variety of indicators including Google Trends, market momentum, social media activity, and market volatility, serves as a critical tool for understanding market dynamics.
Despite its insights, traders and investors are advised to conduct their own research to align their strategies with their investment goals, considering the complexity and volatility inherent in the cryptocurrency markets.
