Bitcoin Sentiment Suggests Serious Greed, But Will A Correction Come?
As Bitcoin made a new all-time high above $68k, the crypto market sentiment changed to extreme greed. Periods of such sentiment have lead to corrections in the past, but will the trend be similar this time?
Bitcoin Fear And Greed Index Starts Pointing At Extreme Greed
As per the latest weekly report from Arcane Research, the fear and greed index is now pointing at extreme greed as BTC makes a new ATH.
The fear and greed index is a Bitcoin indicator that shows what the current crypto market sentiment is. The metric uses a numeric scale that ranges from zero to hundred to display the sentiment.
Values below fifty signal that the market is currently sharing fear, while values above it imply investors are becoming greedy.
If the indicator’s value goes above 75 or below 25, then it means the market is showing extreme greed or extreme fear, respectively.
Periods with extreme values suggest the market could witness a reversal soon. A correction may follow extreme greed values, and a change to uptrend may follow from an extremely fearful market.
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Here is where the current Bitcoin fear and greed index needle points at:
Looks like the crypto market is seriously greedy at the moment | Source: The Arcane Research Weekly Update – Week 44
As the above meter shows, the current market sentiment is that of extreme greed. This is an increase from last week as the values were in the normal greed territory then. This change is caused by BTC reaching a new ATH.
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The market was also greedy last month. The below chart shows the trend in the value of the indicator over the past year.
Crypto market sentiment has been in the greed territory for a while now | Source: The Arcane Research Weekly Update Week 44
The market has now seen one month straight of extreme greed or greed sentiment. The last time this happened was from August to September, and the streak then ended with the El Salvador day crash.
This period of greed might suffer a similar fate. However, the report notes that during Spring the indicator’s value remained consistently high for a prolonged period. So it’s possible a similar trend could be seen in the coming weeks instead.
At the time of writing, Bitcoin’s price floats around $66.5k, up 4% in the last seven days. Over the past month, the crypto has gained 20% in value.
Here is a chart that shows the trend in the value of the coin over the last five days:
BTC’s price made a new ATH today, but has since come down a bit | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research