Bitcoin Investors Turn Greedy, First Time Since March 2022

Data shows investors within the Bitcoin market have turned greedy for the primary time since March 2022, after what was the longest stretch of fear ever.

Bitcoin Fear And Greed Index Now Points At “Greed”

The “fear and greed index” is an indicator that tells us in regards to the general sentiment amongst investors within the Bitcoin (in addition to the broader crypto) market. To represent this sentiment, the metric uses a numeric scale that runs from 0-100.

All values below 50 imply a fearful market, while those above this threshold suggest greedy holders. Although this cutoff point might look clean in theory, in practice, the region between values of 46 and 54 is mostly considered to belong to a “neutral” sentiment. Real breakouts towards fear or greed only happen when the metric crosses below or above this transition region.

There are also two other “special” sentiments: extreme greed and extreme fear. The previous occurs above values of 75, while the latter happens under values of 25. The importance of those extreme sentiments is that tops and bottoms have historically tended to form when the investors have held these mentalities.

For this reason, some traders consider extreme fear periods provide ideal buying opportunities (as bottoms have taken place here), while times with extreme greed may very well be the very best selling windows (since tops occur here).

A trading strategy called “contrarian investing” is predicated on an analogous idea. As Warren Buffet said in his famous quote, “be fearful when others are greedy, and greedy when others are fearful.”

Now, here is how the present sentiment amongst Bitcoin (and wider crypto) investors looks like:

A greedy cryptocurrency sector | Source: Alternative

As may be seen above, the Bitcoin fear and greed index has a worth of 55 at once, suggesting that the market has now properly entered into the greed zone. Before this break into the region, the sector had been within the fear region nonstop since March 2022, around ten months ago.

The below chart shows how the metric’s value has modified through the past yr.

Looks just like the metric has observed some growth in recent days | Source: Alternative

From the graph, it’s visible that the indicator had spent almost your entire past yr not only within the fear zone, but actually all the best way down in the intense fear region. There was just one proper spike into greed during this era, and that was the aforementioned March 2022 instance. This previous surge had only lasted for a single day before the market became fearful again.

These continuous streaks of fear and extreme fear through the past yr were each the longest runs within the history of the indicator. Greed finally returning to the Bitcoin market in spite of everything this while could mean that investors are able to embrace some bullish motion once more, which may very well be a positive sign for the present rally.