Bitcoin’s fear and greed index has started to rapidly shift to extreme greed as crypto continues to rally.
Bitcoin fear and greed needle begins to point to extreme greed
According to the latest weekly report from Arcane Research, the fear and greed index quickly turned to extreme greed values last week.
The “index of fear and greed“It is a Bitcoin indicator that shows the general sentiment of the cryptocurrency market at that time. The metric uses a number scale from one to one hundred to show different feelings.
Values close to zero fall under the category of “extreme fear”, while values at the other extreme imply “extreme greed.” When the indicator does not show values that are too large or too low, the sentiment falls under “fear” or “greed” depending on which side around 50 the value is.
Now, here is a graph showing how the value of the indicator has changed over the years for Bitcoin:
Looks like the crypto market has quickly turned greedy | Source: The Arcane Research Weekly Update - Week 40
As the graph above shows, sentiment had turned greedy last week after a ghastly september, and the values are now falling into the category of extreme greed.
While the month of September had some upward movements, it also had several price drops, which is why the sentiment was scary for the most part.
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The indicator dipped to extreme fear on September 30, but in less than two weeks sentiment has already recovered to extreme greed. The report notes that this shows how quickly sentiment can change among the crypto market.
Right now, BTC is showing strong momentum to the upside as the coin broke $ 58k for the first time since May today. An on-chain indicator shows that both long-term and short-term holders are in profit at the moment, so it’s no surprise that the market has started to get greedy.
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At the time of writing, Bitcoin price floats around $ 57.2k, up 6% in the last seven days. Over the last month, the crypto has gained 22% in value.
The following graph shows the trend in the price of the coin during the last five days:
Bitcoin's price shows a lot of volatility while keeping up an overall upwards trend | Source: BTCUSD on TradingView
Typically, when crypto market sentiment reaches extreme greed territory, the market sees a correction at least in the short term. The price of BTC had a minor drop yesterday and the values of fear and greed have left the territory of extreme greed today as the indicator is now pointing to greed.