The Fear & Greed Index for Bitcoin has reached its highest point since November 2021 when the cryptocurrency hit a record high of $69,000.
This index, released by data provider alternative.me, measures the excitement of investors towards Bitcoin and other popular digital assets. It takes into account factors such as market momentum, volatility, volume, and social media.
The current score of 79 out of 100 indicates that traders are experiencing “extreme greed” as Bitcoin’s price continues to climb above $49,000 and altcoins also see an increase in value. This is the first time in over two years that the index has entered the “extreme greed” zone, which happens when the score surpasses 74.
Interestingly, this surge in greed comes just a month after the launch of spot Bitcoin ETFs in the United States. This may suggest that the short-term selling triggered by the news of the ETF’s approval has come to an end.
In the fourth quarter of 2021, CEO of ARK Invest Cathie Wood predicted that some investors would “sell the news” of the spot Bitcoin ETF’s approval. However, it seems that the continuous rally of Bitcoin and the recent spike in greed have proven her wrong.
Since October of last year, the Fear & Greed Index has consistently remained above 70, indicating a high level of “greed” in the market. It briefly dropped to 50 after the introduction of Bitcoin ETFs in January, but has since rebounded as the price of Bitcoin has more than doubled.
It is worth noting that the Fear & Greed Index is not a perfect indicator and should not be relied upon solely when making investment decisions. However, it does provide insight into the sentiment of the market and can be a useful tool for investors to consider.
