Data shows that bitcoin sentiment has now reached extreme greed levels, even higher than the all-time high (ATH) price in November 2021.
bitcoin Fear and Greed Index Is Now Deep in Extreme Greed Territory
The “Fear and Greed Index” is an indicator created by crypto/fear-and-greed-index/” target=”_blank” rel=”nofollow”>Alternative which tracks the general sentiment present among investors in bitcoin and the cryptocurrency market in general at the moment.
The metric represents this average sentiment in the form of a score that ranges from zero to one hundred. To calculate this score, the index takes into account the following five factors: volatility, trading volume, social media sentiment, market cap dominance, and Google Trends.
When the indicator shows a value below 47, it means that the sentiment around the sector is one of fear. On the other hand, the fact that the index is above the 53 mark implies the presence of greed among investors. Naturally, the region between these two territories belongs to the neutral mentality.
In addition to these three main feelings, there are two “extreme” feelings called extreme fear and extreme greed. The first of them occurs after the age of 25, while the second occurs after the age of 75.
Now, this is what the bitcoin Fear & Greed Index currently looks like:
<img decoding="async" class="alignnone wp-image-596340 size-large aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-Extreme-Greed-at-Levels-Above-November-2021-Peak-Top.png" alt="bitcoin Fear and Greed Index” width=”759″ height=”329″ srcset=”https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-Extreme-Greed-at-Levels-Above-November-2021-Peak-Top.png 759w, https://www.newsbtc.com/wp-content/uploads/2024/03/meter.png?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2024/03/meter.png?w=750 750w” sizes=”(max-width: 759px) 100vw, 759px” loading=”lazy” data-recalc-dims=”1″/>
The indicator appears to have a very high value at the moment | Source: crypto/fear-and-greed-index/" target="_blank" rel="nofollow">Alternative
As can be seen above, the current value of the bitcoin Fear & Greed Index is 90, which means that investors maintain a strong feeling of extreme greed. This last value represents a big jump compared to yesterday's sentiment, when the index was around 82.
The reason behind this sharp rise in the indicator is obviously due to the fact that the price of the cryptocurrency has been advancing towards a new all-time high during its latest rally.
The current level of the Fear and Greed Index is not only high compared to the recent trend, but also considering historical data. The following chart shows how the value of the metric has fluctuated since its inception in 2018:
<img loading="lazy" decoding="async" class="alignnone wp-image-596347 size-large aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/03/1709669848_183_Bitcoin-Extreme-Greed-at-Levels-Above-November-2021-Peak-Top.png" alt="Extreme bitcoin Greed” width=”860″ height=”410″ srcset=”https://www.newsbtc.com/wp-content/uploads/2024/03/chart.png?w=1104 1104w, https://www.newsbtc.com/wp-content/uploads/2024/03/chart.png?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2024/03/chart.png?w=768 768w, https://technicalterrence.com/wp-content/uploads/2024/03/1709669848_183_Bitcoin-Extreme-Greed-at-Levels-Above-November-2021-Peak-Top.png 860w, https://www.newsbtc.com/wp-content/uploads/2024/03/chart.png?w=750 750w” sizes=”(max-width: 860px) 100vw, 860px” data-recalc-dims=”1″/>
The data for the metric over its entire history | Source: crypto/fear-and-greed-index/" target="_blank" rel="nofollow">Alternative
As shown in the chart, the bitcoin Fear & Greed Index has now surpassed the level it assumed during the November 2021 all-time price high, as it sits at values just below those seen between late 2020 and early 2020. 2021.
Aside from this period, there has only been one other case in the metric's history where it reached higher levels than now: the peak of the rally in mid-2019.
Historically, bitcoin has tended to move against majority expectations, and as this expectation has tilted further to one side, the likelihood of a contrary move has only increased.
The peak of the 2019 rally and November 2021 are just two examples of this pattern in action. As such, it is possible that the current extreme levels of the indicator mean that the price is at risk of forming a top at this time.
However, it is worth noting that it does not necessarily have to immediately peak, as during the bull run in the first half of 2021, the metric was able to hold at even higher levels for a while, without the rally being compromised.
btc Price
bitcoin nearly set a new all-time high just before, but its price has since cooled down to the $66,700 level.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/03/Bitcoin-Extreme-Greed-at-Levels-Above-November-2021-Peak-Top" alt="bitcoin price chart” width=”1534″ height=”854″/>
Looks like the price of the coin has been marching up during the past couple of days | Source: BTCUSD on TradingView
Featured image from iStock.com, Alternative.me, TradingView.com chart
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