Crypto Fear and Greed Index Rises to 3-Month High as BTC Rally 14% Weekly

With bitcoin (BTC) surging above $60,000 since the start of the week, investors have become greedy. This is evident in the Fear and Greed index, which shows market sentiment at any given time, turning green in the last two days.

Alternative.me data shows that the fear and greed index is in the greed zone, with a value of 71.

Crypto investors are greedy

The Crypto Fear and Greed index was in the fear zone last week and remained there until Monday, when it turned neutral. The index even fell to 32 on October 11, when BTC briefly dipped below $60,000. The index also spent most of September in the fear and neutral zones, only climbing into the greed region as BTC experienced a brief rally to $65,000 towards the end of the month.

In the past three days, BTC has broken out of the $62,000 range and touched $68,000, currently trading at $67,000, according to data from CoinMarketCap. This rally led to a feeling of avarice among traders as they scramble to capitalize on bitcoin’s rise and fight the fear of missing out (FOMO). The index rose to 73 on October 16 when BTC hit $68,400 and has now fallen slightly to 71, following the cryptocurrency’s slight correction.

The index is determined by analyzing data from various sources, including social media, trends, market momentum, volatility, surveys and dominance. The numbers are derived from a meter that counts from 0 to 100, with the first representing extreme fear, 50 indicating neutrality, and 100 signifying extreme greed.

In particular, investors tend to be fearful when prices are falling, and analysts believe that these periods are the best buying opportunities. Conversely, market participants become greedy when prices rise, leading to FOMO and an eventual price correction.

What could happen next?

The last time the fear and greed index reached this high was in late July when BTC recovered from the $56,000 to $68,000 range. However, due to the Japanese yen crisis, the asset plummeted to $53,000 in the following days.

While BTC could suffer the same fate in the coming days, factors such as increased demand and the market’s anticipation of the second stage of the bull cycle make this unlikely.

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