Bitcoin Breaks $104,000, But Hype Still Not High: Bullish?

Data shows the Bitcoin Fear & Greed Index still hasn’t achieved an extreme value. Here’s what this could mean for BTC’s price recovery.

Bitcoin Fear & Greed Index Is Sitting At 75 Right Now

The “Fear & Greed Index” refers to an indicator created by Alternative that tells us about the average sentiment present among the investors in the Bitcoin and wider cryptocurrency markets.

This index bases its estimation on the following five factors: volatility, trading volume, social media sentiment, market cap dominance, and Google Trends. The indicator represents the calculated sentiment as a score lying between zero and hundred.

When the metric has a value under 47, it means the investors as a whole share a sentiment of fear. On the other hand, it being over 53 implies the presence of greed in the market. All values lying between these two cutoffs correspond to an overall neutral mentality.

Now, here is how the latest value of the Bitcoin Fear & Greed Index looks:

Looks like the metric is at a value of 75 at the moment | Source: Alternative

As is visible above, the traders in the sector currently hold a sentiment of greed as the index is sitting at 75. This greedy mentality is also quite strong, in fact so strong that it’s right on the edge of a special zone known as the extreme greed.

Extreme greed occurs when the indicator surpasses this 75 level. There is a similar region for the fear side as well, called the extreme fear. This one occurs when the metric falls below 25.

The present value is a notable improvement as compared to a few days ago, but it’s unchanged from yesterday. This is interesting as the cryptocurrency has only continued its recovery run over the past day.

The below chart shows a record of the values of the Bitcoin Fear & Greed Index over the past year.

The indicator appears to have seen a rise in recent days | Source: Alternative

Historically, Bitcoin has tended to move in a way that goes contrary to the expectations of the majority, with the probability of such an opposite move only rising the more sure the crowd becomes. Because of this, tops and bottoms in the asset have generally occurred when the index has been in the respective extreme zone.

BTC has furthered its run today as the indicator’s value is likely to be higher tomorrow, but the fact that the coin has been rallying towards its all-time high while the index has been sitting out of the extreme greed zone could be a positive sign for its sustainability.

The price top last month coincided with the Fear & Greed Index hitting 87, while the one in March with 88. It’s possible that the next top might occur under these levels, but they still provide some reference of when the sentiment starts becoming truly heated up.

BTC Price

At the time of writing, Bitcoin is trading around $104,800, up more than 11% over the past week.

The price of the coin is fast charging toward its ATH | Source: BTCUSDT on TradingView

Featured image from Dall-E, Alternative.me, chart from TradingView.com