The Bitcoin Fear and Greed Index has started to quickly turn into extreme greed as the crypto continues to rally.
Bitcoin’s Fear and Greed Needle Begins Pointing to Extreme Greed
According to the latest weekly report from Arcane research, the fear and greed index quickly rose to extreme greed values last week.
The “Fear and Greed Index” is a Bitcoin indicator that shows the general sentiment of the crypto market at the time. The metric uses a numeric scale of one to one hundred to display different sentiments.
Values close to zero fall under the category of “extreme fear” while values at the other end imply “extreme greed”. When the indicator shows neither too high nor too low values, the sentiment falls under the category of “fear” or “greed” depending on which side the value is around 50.
Now here is a chart that shows 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 chart above shows, sentiment turned greedy last week after a scary September, and stocks now fall into the category of extreme greed.
While September saw some upward movements, it also saw several price drops, and that is why the sentiment was mostly one of fear.
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The indicator plunged to extreme fear on September 30, but in less than two weeks sentiment has already returned to extreme greed. The report notes that this shows how quickly sentiment can change in the crypto market.
Right now, BTC is showing strong upward momentum as the coin broke $ 58,000 for the first time since May today. A chain indicator shows that long term holders and short term holders are currently profiting, so it is no surprise that the market has started to get greedy.
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At the time of writing, the price of Bitcoin is floating around $ 57.2,000, up 6% over the past seven days. Over the past month, the crypto has gained 22% in value.
The chart below shows the coin’s price trend over the past five days:
Bitcoin's price shows a lot of volatility while keeping up an overall upwards trend | Source: BTCUSD on TradingView
Usually, when the sentiment of the crypto market reaches the territory of extreme greed, the market observes a correction at least in the short term. The price of BTC dipped slightly yesterday and fear and greed stocks left the territory of extreme greed today as the indicator now points to greed.