Fear and Greed Index Turns to Greed as Bitcoin Hits Two Month High

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The fear and greed index has been updated to “greed” as bitcoin hits $42,600.

Bitcoin has seen a resurgence in price following twelve consecutive days of bullish momentum. Bitcoin has seen twelve days of green for the first time since February as it headed towards its previous all-time high.

However, following a dramatic decline to $29,000 in July, bitcoin has managed to climb nearly 45% in less than two weeks. Currently priced at $41,600 on Sunday, the fear and greed index has shifted to 60, which indicates greed in the market. The shift in momentum comes one month after the fear and greed index was at 21, or extreme fear.

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Bitcoin sentiment breaks free from ‘extreme fear’ — returning to ‘neutral’ for the first time since May

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The Bitcoin Fear and Greed Index has finally returned to ‘neutral’ after being stuck in ‘fear’ territory since mid-May.

Fear and Greed Index has finally returned to ‘neutral’ after being stuck in ‘fear’ territory since mid-May. The index, which reflects investor sentiment, hit its lowest valuation in a year on July 21, when it hovered at 10.

The uptake in sentiment comes as Bitcoin’s value finally broke away from its support price of $30,000 and temporarily breached the $40,000 barrier.

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What is ‘fear’ and what is ‘greed’?

Bitcoin isn’t out of the woods just yet

Sentiments around Bitcoin and cryptocurrencies seem to be returning to normal. The Bitcoin Fear and Greed Index (BFGI) — which measures investor sentiment around digital currencies — has finally come back to ‘neutral’ after being caught between ‘fear’ and ‘extreme fear’ since mid-May.As of July 30, the index stood at 53 — double the average of the previous week, which was around 23.Readings from the past two weeks show extreme levels of fear. On July 21, the index showed 10, which is perhaps the lowest number that has been recorded since April last year.This is in stark contrast to the sentiment during the last few months of 2020, where the index was roaring at above-90 highs that continued into February this year.But in mid-May, when Bitcoin’s price halved, so did the value of sentiment on the index from 68 to 31. Both Bitcoin’s price and the greed continued on their declining path till July 22.It’s no secret that the cryptocurrency market runs on sentiment — which is just another word for emotions.When the index shows ‘extreme fear,’ it signifies that investors are worried. For those who are looking to ‘buy the dip,’ this can be an opportunity. Alternatively, when the index shows ‘extreme greed’, it is an indicator that the market is due for a correction.The values of index are determined by considering five factors — volatility, trade volumes, social media, surveys, and dominance.The coin saw its value surge to $40,000 this week on rumours that Amazon may allow its customers to pay using Bitcoin — a speculation that the company has denied.Analysts at the Kraken crypto exchange believe that the world’s oldest cryptocurrency is currently facing a ‘do-or-die’ moment . “Given BTC’s struggles at cracking $40,000 to $42,000 resistance in the past, the bulls will, however, need to turn $40,000 to support should they look to break out of what has been several months of range bound trading between $30,000 to $42,000,” they said in a note.Despite the bullish signals in the market, there are major risks to the outlook for bitcoin. A key one being the threat of tougher regulations.Countries around the world are currently mulling over whether or not to ban cryptocurrencies, like China seems to be doing. The other options on the table are regulations and each region has its own take.South Korea, for instance, wants to make it easier for the authorities to seize cryptocurrencies from digital wallets of crypto tax evaders. Meanwhile, in Europe, the Union is experimenting with the idea of launching its own central bank digital currency (CBDC) in addition to regulation.The primary concern for governments seems to be around tax evasion, money laundering, and other illicit activities. For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.

Crypto Fear and Greed Index Taps Low at ‘Extreme Fear,’ BTC Technicals Point to Uncertainty – Market Updates Bitcoin News

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Crypto Fear and Greed Index Taps Low at ‘Extreme Fear,’ BTC Technicals Point to Uncertainty

On Wednesday, following the drop below the $30,000 region, bitcoin’s price has rebounded more than 8% since Tuesday’s low. Meanwhile, the sentiment metric recorded by the Crypto Fear and Greed Index (CFGI) is extremely low, pointing to “extreme fear” in the market. Despite being a scary term, the time is usually the best time to obtain assets for a lower price. However, data from Tradingview’s technicals show bitcoin is still in the “sell” range, while bitcoin market oscillators are more “neutral.”

CFGI Sentiment Metric Reaches ‘Extreme Fear’

The price of bitcoin (BTC) tapped a low of $29,300 on July 20, 2021, and since then the price has managed to jump back above the $32,000 handle. Despite the rebound, there’s a lot of uncertainty within the crypto space as far as short-term bitcoin price predictions are concerned.

Some believe the price may plunge to the $20,000 zone again and others believe a rebound is in the cards and the next trajectory will be well above the $64K all-time high. Most traders who believe this rebound could happen, think that today’s bitcoin price movements are eerily similar to the prices BTC saw in 2013. At that time, BTC plunged to $50 per coin after skyrocketing well above the $200 handle in mid-May 2013.

Bitcoin’s price then jumped close to 2,400% after the summer 2013 low, and surged to the crypto asset’s first four-digit USD all-time high. After BTC dropped to $29,300 on Tuesday, the Crypto Fear and Greed Index (CFGI) tapped a low of ten on the charts. The score of ten is not the lowest point the CFGI metric has recorded but it is very low in comparison to most days. The last time the CFGI metric recorded a ten was in mid-June and at the end of May as well. Since the end of May, the CFGI metric hasn’t been this low in over a year as the last time the CFGI hit a ten or lower was during the March 12, 2020 market rout, otherwise known as ‘Black Thursday.’

While the extreme fear sentiment may seem dismal, traders believe it is one of the best entry points to get into any market. A market filled with panic sellers and “extreme fear” is sure to see cheaper assets than one filled with “extreme greed,” which is the highest end of the CFGI spectrum. Essentially the CFGI analyzes “emotions and sentiments from different sources and crunches them into one simple number,” the website details.

Oscillators and Moving Averages Tell a Similar Story

In contrast to the CFGI, Tradingview’s BTC/USD technicals show a similar story but some of the indicators can be perceived as a different outlook. A single-day summary of Tradingview’s BTC/USD technicals shows a scale toward the “sell” range.

Moving averages (MA) are different and Tradingview’s MA technicals point to the “strong sell” range. Alongside this, BTC/USD oscillators are a bit warmer and are indicating a “neutral” range. For instance, the relative strength index (RSI 14) shows “neutral” and stochastic (14, 3, 3) also indicates things are “neutral.”

All the moving average indicators suggest the “sell” range while the simple moving average (SMA 10) and the exponential moving average (EMA 10) are in the “buy” range. As far as BTC/USD oscillators, the only signal for “buy” is the momentum indicator but the moving average convergence divergence (MACD), a trend that follows momentum, is recorded as a “sell” on Wednesday.

Delta Exchange CEO Says ‘$30K Has Proven to Be Reliable Support Since May’

Meanwhile, despite the plunge on Tuesday morning, bitcoin (BTC) continues to hold a support zone. In a note sent to Bitcoin.com News, Delta Exchange CEO Pankaj Balani explains the current support, at least so far, has been reliable.

“Bitcoin has been grinding lower since the start of this month,” Balani said. “Volatility has compressed significantly with a lower range. Bitcoin is trading in a significant support zone of $29 – $31K USDT. $30K has proven to be very reliable support since May. A breakdown of this level is likely to result in a significant increase in volatility and a final capitulation of crypto assets. That said, BTC is still in the $30K – $40K rectangle until a conclusive breakdown takes place,” the Delta Exchange executive added.

What do you think about bitcoin’s CFGI metric tapping “extreme fear” and the technicals from today’s Tradingview stats? Do you agree with Pankaj Balani’s reliable support comment? Let us know what you think about this subject in the comments section below.

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