Bitcoin (BTC) has been flirting with the $100,000 mark over the last 48 hours as optimism for a higher rally engulfs the market. As a result, investors have become very greedy.
Data from the Crypto Fear and Greed Index, which tracks investor sentiment across the market, indicates that participants are in an extremely greedy phase. This is evident in the index figure rising above 90 to hit 94 for the first time in three years.
Investors Become Extremely Greedy
The fear and greed index gauges investor sentiment by analyzing several factors, including market volatility, social media trends, momentum, and Bitcoin dominance. When the index sits close to 0, it is usually a sign of extreme fear among investors, while a figure close to 50 signals neutrality in the market. As the figure rises to 100, it indicates that investors have gotten greedy, and this often occurs during brief or major rallies.
The last time the fear and greed index touched 94 was mid-February 2021. At the time, BTC was on an upward trajectory, hitting an all-time high above $47,000. Even during bitcoin’s last bull market top in November 2021, the index stopped at 74 before retracing to fear levels.
Likewise, bitcoin’s rally to a record high in March 2024 saw the index hover around 81, indicating a level of extreme greed among investors. With the cryptocurrency hitting $99,000 for the first time and hovering less than 2% away from $100,000, the greed level among investors has skyrocketed.
Notably, the index began to rise two weeks ago following Donald Trump’s emergence as the winner of the United States presidential elections and has remained above 70 since November 5.
Altcoin Season Soon?
Historically, BTC experienced major corrections shortly after the fear and greed index indicated extreme greed among investors. The market is bound to cool down after getting overheated. Analysts have also opined that BTC needs a significant correction after this rally so the bull run could extend to 2025.
Also, altcoin season, which refers to a period when capital leaves BTC and flows into other cryptocurrencies, has always occurred when BTC cools down. As BTC retraces and its dominance reduces, investors usually turn to other assets, spiking their demand and, in turn, their prices. Hence, it is safe to say that the altcoin season is closer than ever because BTC is bound to experience a correction soon.
The post Bitcoin Fear and Greed Index Hits 3.5-Year High: Does it Hurt BTC’s Chances for $100K? appeared first on CryptoPotato.
Source link
Mandy Williams
https://cryptopotato.com/bitcoin-fear-and-greed-index-hits-3-5-year-high-does-it-hurt-btcs-chances-for-100k/
2024-11-23 15:38:22
