Bitcoin Fear & Greed Index Reaches ‘Neutral’ Level for the First Time Since October

Bitcoin market sentiment has seen noticeable improvement recently, as the Fear & Greed Index has shifted into the neutral zone for the first time in months.

Key Takeaways:

The Bitcoin Fear & Greed Index has reached a neutral value of 48.
This is the first time since October that the index has shown neutral sentiment.
The significant change in sentiment stems from Bitcoin's price recovery above $97,000.
Caution among investors hints that the ongoing rally may have room to grow without excessive greed.
The recent market movement has led to notable short-liquidation events across major cryptocurrencies.

Bitcoin

Current Status of the Bitcoin Fear & Greed Index

The “Fear & Greed Index” is an indicator designed by Alternative that reflects the average sentiment among traders in the Bitcoin and broader cryptocurrency markets. It evaluates the investor mindset using data from five key factors: market cap dominance, trading volume, volatility, social media sentiment, and Google Trends.

The index operates on a numerical scale from 0 to 100. Values below 47 indicate fear among investors, while those above 53 suggest greed is dominating the sentiment. A reading between these two thresholds indicates a net neutral sentiment.

Here’s an overview of the current market sentiment according to the Fear & Greed Index:

Bitcoin Neutral

As shown, the current index value is 48, which signals a neutral sentiment surrounding Bitcoin. This marks a significant shift compared to the market sentiment just a day ago.

Bitcoin Fear & Greed Index

The Bitcoin Fear & Greed Index was at 26 on Tuesday, indicating that investor sentiment was deeply entrenched in the fear zone. This turnaround in trader mood is attributed to a recovery rally that has propelled Bitcoin's price above the $97,000 mark.

Although the Fear & Greed Index has not yet entered the greed territory, indicating that investors remain cautious about the bullish price developments, historical trends in the cryptocurrency market show that movements often contradict the majority’s expectations. Thus, the hesitance of traders to become overly greedy at this stage could actually bode well for the sustainability of the rally.

It is crucial to note that this recent shift in sentiment has occurred quickly, so the indicator will be important to monitor in the coming days, as a further transition into the greed zone may be on the horizon.

This current break into the neutral zone is noteworthy, as it is the first occurrence since late October. The sentiment of greed has not been witnessed since the first half of October, which was over three months ago.

In related news, the recent Bitcoin recovery has caused a significant number of liquidations, according to on-chain analytics firm, Glassnode.

Crypto Liquidations

Glassnode reported, “Across the top 500 cryptocurrencies, the latest move triggered the largest short-liquidation event since 10/10.”

Bitcoin Price Update

As of the latest report, Bitcoin is approximately valued at $97,500, reflecting an increase of more than 7% over the past week.

Bitcoin Price Chart

The price trend of Bitcoin over the last five days shows an upward movement, indicating a positive shift in the market.