The bitcoin Fear & Greed Index has risen to its highest level in almost three years, reaching extreme greed at breakneck speed. Using past performance and indicators, it is possible to deduce where the btc price is headed after reaching this new milestone.
bitcoin Fear and Greed Index at New 2-Year High
The bitcoin Fear & Greed Index is a measure of investor sentiment and how they view the market. This can help determine whether investors are currently putting money into the market or taking money out of it.
There are five main categories in the Fear and Greed Index, including Extreme Fear, Fear, Neutral, Greed, and Extreme Greed. The index is ranked on a scale of 0 to 100, with a variety of numbers representing a category of investor sentiment.
Extreme Fear is the lowest on this scale, which goes from 0 to 25. Then, from 26 to 46, we have Fear. Both categories indicate an unwillingness of investors to enter the market and have often been presented as the best time to invest in cryptocurrencies.
Next on the scale is 47 to 52, which represents Neutral territory. Then 53 to 75 is Greed when investors start to feel confident in the market. Finally, 76 to 100 is Extreme Greed, which represents maximum optimism. As the crypto/fear-and-greed-index/#google_vignette” rel=”nofollow”>bitcoin Fear and Greed Index Currently Stands at 79which is Extreme Greed, could have some implications for the market.
<img decoding="async" class="aligncenter size-medium" src="https://technicalterrence.com/wp-content/uploads/2024/02/Bitcoin-Fear-and-Greed-Index-Hits-Highest-Level-Since-2021" alt="Tradingview.com btc Price Chart (bitcoin Fear and Greed Index)” width=”3286″ height=”1530″ loading=”lazy”/>
btc price pushes toward $57,000 | Source: BTCUSD on Tradingview.com
Does extreme greed mark the top?
Just as the bitcoin Fear & Greed Index can be useful in determining when is a good time to buy, it can also provide indications as to when a market top might be coming. Analyzing the historical performance of the cryptocurrency market compared to the Fear & Greed Index, we see a persistent correlation between the peak of euphoria and the top of the market.
The most recent example of this is November 2021, when the index score rose to 84, just 5 points lower than the current score of 79. At this point, bitcoin price had risen to $69,000 before encountering resistance, the one that will eventually succumb.
In the following days, the sentiment would begin to change, as would the price of bitcoin. A similar pattern was also observed in February and March 2021, when the index reached a high of 94. In the following days, interest decreased, marking the peak at that particular point.
If the same pattern were to repeat in this scenario, then bitcoin might have a few more days of runway before it explodes. Currently, the cryptocurrency is already experiencing significant resistance at $57,000, which could suggest that the top is near.
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
