For the past ten days, the Fear and Greed index on the bitcoin and cryptocurrency markets has been quite positive.
For example, today, on a scale from zero to one hundred, the value detected is 73.
Bitcoin Fear and Greed Index is 73 ~ Greed pic.twitter.com/ZYttdgo4IX
— Bitcoin Fear and Greed Index (@BitcoinFear) August 18, 2021
Since zero corresponds to maximum fear, while one hundred corresponds to maximum greed (or enthusiasm), the cryptocurrency market is currently in the “greed” zone but without excess.
Generally, one considers extreme greed when exceeding 75, while over 80 could be regarded as excessive.
During 2021 the value of this index remained more or less constantly positive until May 12, with extreme peaks between January and February, even at 95.
Starting from mid-May, however, it went into heavy negative territory, touching 10 several times until the end of July.
The curious thing is that the price of bitcoin during the year has never actually fallen below the previous year’s highs. Still, despite this, for about two months, the cryptocurrency market has been dominated by extreme fear, probably excessive.
The Fear and Greed index during 2021
On the other hand, for the first months of the year, it was the enthusiasm to be excessive, perhaps contributing in no small way to bring the price of bitcoin up to the historical highs of mid-April.
However, we must never forget that the data reported refers to the previous 24 hours, so the one published this morning probably does not reflect today’s drop, although it started many hours ago.
Generally, when the enthusiasm is excessive, it means that the markets are overly appreciating cryptocurrencies, so much so that a drop can be suspected. Instead, a level of 73 points does not seem to suggest that there is a real excess of enthusiasm going on, so much as to have generated excessive price growth. However, this does not mean that they cannot fall further.
On the other hand, however, this climate of enthusiasm that has been breathed for about ten days now on cryptocurrency markets, and which in turn was preceded by about ten days in which the fear & greed index remained substantially in the neutral zone, seems to suggest that positive expectations are instead shared regarding bitcoin and cryptocurrency prices in the short or medium term.
Note that already several months ago, the hypothesis was put forward that the current level of $45,000 could have served as a support for the price of bitcoin, but then began a bearish phase that ended only on July 21. It is possible that once the temporary bearish phase ended, this level started to act as support again, and according to the authors of those hypotheses, the next target for BTC could be 70,000$.
However, it is not impossible that a new bearish phase could be triggered, but this last hypothesis seems not gathering many supporters in the short term.
The post Bitcoin: the Fear and Greed index returns to enthusiasm appeared first on The Cryptonomist.
