Crypto Fear & Greed Index hits 70 as Bitcoin nears its ATH again – What next?

Key Takeaways

The crypto market stays in a robust “greed” part, with bullish sentiments pushing Bitcoin and Ethereum increased regardless of overbought alerts. 

Investor sentiment within the crypto market took a bullish flip just lately. This, after the Crypto Worry & Greed Index peaked at 70 – A transparent sign of heightened optimism.

On the time of writing, it had eased to 62. Nonetheless, it’s value stating that the index stays firmly within the “Greed” zone. What this means is that there’s a state of sustained market confidence proper now. 

The advance in investor sentiment appeared to align with a 2.38% uptick within the international crypto market cap to $4.05 trillion. It was supported by Bitcoin [BTC] surging by 3.33% to $121,706 and Ethereum [ETH] climbing by 2.02% to $4,271 over the previous 24 hours.

Do historic traits point out something?

Previously, durations of intense greed within the cryptocurrency market have continuously been adopted by value pullbacks or sideways buying and selling. This, as buyers secured income or repositioned to keep away from the dangers of inflated valuations.

The Crypto Worry & Greed Index hinted at strong market confidence at press time. On the identical time although, its readings can be seen as a warning signal. May there be potential turbulence within the close to time period? For energetic merchants, this dilemma underlines the significance of assessing danger tolerance and avoiding impulsive strikes pushed by FOMO.

Santiment’s newest datasets appeared so as to add one other layer to this evaluation. As an illustration – Each Ethereum and Bitcoin’s Relative Energy Index (RSI) gave the impression to be on the way in which down after peaking within the overbought zone.

Such a mixture might trace at the potential for a near-term market pullback. Nonetheless, certainty will stay elusive in such dynamic situations.

Supply: Santiment

A have a look at Bitcoin’s dominance…

Bitcoin’s market dominance continues to play a pivotal position in sustaining the general bullish sentiment throughout the crypto sector although.

With a worth of 60.80% at press time, this degree alluded to a “flight to security,” with buyers more and more leaning in direction of essentially the most established and liquid cryptocurrency. Such dominance usually units the tone for the broader market, significantly in periods of speedy value swings or heightened uncertainty.

If this dominance persists, it might assist lengthen the present wave of greed, retaining bullish momentum intact for now.

Neighborhood weighs in…

Remarking on the identical, an X consumer said, 

“They usually stated crypto was useless. That is just the start fam – if we map the expansion trajectory to conventional markets, we’re critical upside potential. Keep in mind when $1T appeared inconceivable? Now we’re at $4T and the concern/greed index is simply at 62.”

One other X consumer, Sebastian Diaconu, went a step additional and talked about each the nice and unhealthy sides of the market, whereby, for the nice aspect, he stated, 

“Worry-Greed meter remains to be at first rate ranges, which implies there may be quite a lot of upside potential.”

For the unhealthy aspect although, he added, 

“Altcoin season that everybody is ready for isn’t taking place. No less than not now.  Sure, we’ve Ethereum, XRP and…that’s about it. So, the key query is: will there be an Altcoin Season or not?”

Is that the entire story although? Nicely, in line with AMBCrypto, a excessive greed sign doesn’t all the time translate into an instantaneous downturn. Market sentiment can stay elevated for prolonged durations, earlier than any vital correction units in.

For instance – On 23 Could, the Crypto Worry and Greed Index touched 78, a degree firmly within the “excessive greed” zone. This coincided with Bitcoin’s ascent to $111.8k.

Such an alignment can also be proof of how bullish momentum can persist, regardless of overheated sentiment. This might go away room for additional beneficial properties earlier than market forces doubtlessly recalibrate.