Bitcoin’s Fear and Greed Index is at a 16-month high, rising to 64, as traders appear bullish on the coin’s prospects.
Bitcoin traders are greedy
According to the index reading On March 18, it appears that traders are “greedy” looking to buy more coins and up the gear. The change in sentiment follows the exemplary performance of bitcoin (BTC) in recent trading days.
The Fear and Greed Index is a crypto sentiment indicator that is closely watched by traders and investors. Unlike other asset classes, cryptocurrencies and bitcoins can be influenced by hype.
Depending on market conditions, there may be fear of missing out (FOMO) when traders expect Bitcoin to outperform. Meanwhile, in depressed conditions characterized by falling asset prices, there is Fear, Uncertainty, and Doubt (FUD). This can trigger a selloff, forcing prices down.
As of writing March 18, BTC is changing hands above the $27,000 mark, firm on the last trading day, up more than 35% in less than a week. Bitcoin’s rapid expansion follows a series of fundamental events that spooked traditional financial markets, forcing capital into trustless and censorship-resistant assets, primarily bitcoin and other crypto assets including ethereum (ETH).
The banking crisis in the US forced the prices of cryptocurrencies to rise
Following news of a bank run on Silicon Valley Bank (SVB) and the closure of Signature Bank, crypto sentiment quickly flipped from FUD to FOMO as bitcoin soared from as low as $19,700 to over $27,000 at writing.
Fears of a market-wide collapse and of the Federal Reserve, the United States’ central bank, providing a safety net for struggling banks is raising rumors that they have returned to easing, fueling the bullish trend in stocks. cryptocurrencies and bitcoins.
This preview is expected to further boost reading for the Fear and Greed Index. During the last bull cycle in November 2021, when Bitcoin peaked over $69,000, the reading was 72. Whether this reading will be exceeded even with coins trading at more than half of the high has yet to be determined. of 2021.
On the daily charts, bitcoin has already bottomed out and is trading above the February 2023 and August 2023 highs, rising 74% from the November 2022 lows.
