At its worst since mid-October: Will there be a coup?
Bitcoin investor sentiment has fallen to its lowest level since mid-October. How this could impact the price of Bitcoin.
Alternative has created a “Fear and Greed” index to measure the sentiment of Bitcoin and crypto traders.
To calculate its value, this statistic takes into account volatility, trading volume, market cap dominance, social media sentiment, and Google trends.
When the index is above 53, most investors are greedy. However, a dip below 47 indicates that fear is dominating the industry. As expected, a signal between these two extremes indicates net neutrality.
The latest value of the index is 65, which indicates investor greed. As you can see here, the index has fallen sharply from yesterday.
Even without taking into account today’s drop, Bitcoin’s fear and greed index has been on the decline for some time. The recent drop in Bitcoin’s price is further exacerbating the sentiment.
Yesterday's index value of 73 was close to excessive greed. If the index is 75 or higher, the market has this attitude.
The hype around cryptocurrencies hitting new highs above $100,000 has kept the index in this region for most of this month.
Historically, Bitcoin moves against the herd, with the opportunity increasing as investors become more certain about a particular direction.
Extreme greed occurs where Bitcoin price peaks are most likely. Extreme fear occurs at 25 or below on the fear side.
Bitcoin price may not undergo another major downturn after the current low sentiment. Greed is still there, so there may be little chance of another rally.
