Data shows that bitcoin investors still maintain a sense of fear as the cryptocurrency's price continues to consolidate.
bitcoin's Fear and Greed Index is currently pointing to “fear”
The “Fear and Greed Index” is an indicator created by crypto/fear-and-greed-index/” target=”_blank”>Alternative This, in short, tells us about the general sentiment present among bitcoin traders and other broader cryptocurrency markets.
To determine this sentiment, the index uses data related to the following five factors: volatility, trading volume, social media sentiment, market capitalization dominance, and Google Trends. The indicator represents this sentiment as a score between zero and one hundred.
Investors share a feeling of greed when the metric has a value above 53. On the other hand, being below 47 implies a predominance of fear in the market. The region between these two thresholds naturally corresponds to neutral sentiment.
Now, here's what the current value of the Fear and Greed Index looks like:
<img class="wp-image-637436 size-large" src="https://technicalterrence.com/wp-content/uploads/2024/08/Bitcoin-investors-remain-fearful-what-needs-to-happen-for-change.png" alt="Fear of bitcoin” />
As you can see above, bitcoin’s Fear and Greed Index is at 34 right now, suggesting that investors are feeling fear. The current fearful mindset is not too strong, given the distance from neutral territory.
At the beginning of the month, the indicator had shown particularly low values, as shown in the following chart.
<img class="wp-image-637434 size-large" src="https://technicalterrence.com/wp-content/uploads/2024/08/1724440431_890_Bitcoin-investors-remain-fearful-what-needs-to-happen-for-change.png" alt="bitcoin Fear and Greed Index” srcset=”https://www.newsbtc.com/wp-content/uploads/2024/08/chart_c9b453.png?w=1114 1114w, https://www.newsbtc.com/wp-content/uploads/2024/08/chart_c9b453.png?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2024/08/chart_c9b453.png?w=768 768w, https://technicalterrence.com/wp-content/uploads/2024/08/1724440431_890_Bitcoin-investors-remain-fearful-what-needs-to-happen-for-change.png 860w, https://www.newsbtc.com/wp-content/uploads/2024/08/chart_c9b453.png?w=750 750w” />
On August 6, the fear and greed index hit a low of 17, the lowest level in more than two years. When the indicator reaches such low values, it no longer reflects just fear, but a special feeling called extreme fear.
Extreme fear is defined as the area that appears after the age of 25. There is also a similar region for the greed side, called extreme greed, which appears after the age of 75.
Interestingly, the low of extreme fear coincided with bitcoin's low below the $50,000 level. This is similar to what has been observed throughout the asset's history.
btc has tended to move in the opposite direction to most people’s expectations, and zones of extreme sentiment are evidently where this expectation is strongest, so it makes sense that price reversals are also the most likely to occur within them.
With sentiment in normal fear territory and bitcoin price consolidating, another foray into extreme fear may be necessary if bitcoin is to initiate a fresh bullish push. It remains to be seen how the indicator develops in the coming days.
btc Price
bitcoin has been unable to find a solid break above the $61,000 level recently, and it seems like the latest attempt may have ended in failure similar to btc, which fell back to $60,800.
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