Data shows that the sentiment of Bitcoin has cooled off from extreme greed as bearish price action continues for BTC and other cryptocurrencies.
Bitcoin Fear & Greed Index Is Now Pointing At ‘Greed’
The “Fear & Greed Index” is an indicator created by Alternative that tells us about the average sentiment among investors in the Bitcoin and wider cryptocurrency markets.
This metric uses a numeric scale from zero to hundred to represent the sentiment. All values above the 53 mark correspond to the investors holding a sentiment of greed, while those under 47 suggest fear in the market. The territory in between the cutoffs implies a net-neutral mentality.
Now, here is what the Bitcoin Fear & Greed Index says regarding the current market sentiment:
As is visible above, the indicator has a value of 74, which means the investors share a sentiment of greed right now. This current value is also quite deep into the region, so deep that it sits right on the boundary of a special zone called extreme greed.
The market experiences extreme greed whenever the index breaks above the 75 mark. There is also a similar territory for the fear side, known as the extreme fear, occurring under 25.
The extreme sentiments have historically been quite significant for Bitcoin and other cryptocurrencies, as major tops and bottoms have tended to occur in these regions.
The relationship between sentiment and price has been inverse, meaning extreme greed has been where tops have taken place, while extreme fear is the region of bottoms.
During the latest leg of the bull run, the index generally spent time inside the extreme greed zone. The metric was in the region just yesterday.
The change in the sentiment has come as BTC has witnessed a pullback and the altcoin market has gone through a crash. Given the historical pattern that Bitcoin has usually observed, this latest cooldown in investor sentiment could turn out to be a positive and potentially allow the rally to see a continuation.
In some other news, the Estimated Leverage Ratio for the BTC-USDT pair has observed a decline recently, as CryptoQuant founder and CEO Ki Young Ju pointed out in an X post.
The Estimated Leverage Ratio measures the average amount of leverage that the futures market users are opting for. The fact that this metric has registered a drawdown recently could be constructive for Bitcoin, as it means there is lower risk of a chaotic mass liquidation event happening.
BTC Price
Bitcoin had gone as low as under $94,300 yesterday, but it appears the coin has been quick to recover as its price is already back at $98,500.
