Crypto Fear & Greed Index hits 74 as Bitcoin breaks $82K, but did it mark a local top?

Only a week for the reason that begin of September, BTC has already rallied to a close to four-month excessive, surpassing the $82.2k degree. Regardless of the pullback towards $78k, the market nonetheless appears to be pricing in additional upside.

In line with the Crypto Concern & Greed Index, greed continues to be dominating sentiment, with the index at 69. This implies that there’s a sturdy danger urge for food whilst Bitcoin trades close to $80k. However with sentiment this bullish, may greed itself turn into a bearish catalyst?

Based mostly on the chart above, the Crypto Concern & Greed Index has dropped from the height of 74, which was noticed on the 4th of September. So, whereas greed nonetheless dominates sentiment, it may be anticipated that the chance urge for food is beginning to cool off. 

Often, Bitcoin tops usually are not fashioned till the index strikes into “Excessive Greed,” the place euphoria kicks in and buyers are extra inclined to understand income.

Provided that the index is presently at 69, it seems there’s nonetheless room for BTC to rise earlier than sentiment hits the overheated ranges, and in that case, BTC’s present sideways chop is merely a consolidation section, not a topping sample.

Nonetheless, the macro FUD is simply starting. If the sentiment turns bearish, and BTC fails to retest the current highs, would this bearish flip of greed be the primary signal of the top of Bitcoin’s [BTC] September rally?

Crypto concern and greed index meets harder macro backdrop

The reversal within the Crypto Concern & Greed Index shouldn’t be a fluke.

On the macro entrance, this week may carry loads of volatility with the important thing CPI information due for launch. Furthermore, the speed hike expectations have climbed again to 60%, which suggests there’s a rising concern across the upcoming FOMC assembly.

Moreover, the US 10Y Treasury yield continues to be hovering round 4.8%, which implies the monetary situation is tightened, making the macro setup more difficult for the chance belongings.

Notably, that is the place the chart under turns into extra attention-grabbing. In line with Coinglass information, for the reason that prime of the Bitcoin worth in October close to $126k, the Crypto Concern & Greed Index has not entered the territory of maximum greed.

As a substitute, the earlier market tops got here when the index pushed deeper into the greed zone after which turned again.

So, if historical past is any information, this reversal within the greed sign could also be greater than only a random transfer. 

With the macro backdrop rising ever extra precarious, BTC’s retreat from the $82k peak, and tightening expectations of price hikes, the buyers’ danger urge for food appears to be cooling down. Thus, the reversal within the greed sign may very well be an early warning that Bitcoin is approaching a neighborhood prime.

And if this situation continues to play out, BTC’s rally in September will probably turn into a dangerous affair.

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