Crypto Fear And Greed Index Barrels Toward Extreme Greed Again As Bitcoin Price Clears $101,000, Is This Good News?
Bitcoin price has once again surpassed the $100,000 mark after rising for three consecutive days. In particular, Bitcoin gained 12.5% after bouncing off the $90,000 support on Monday, January 13, returning above $100,000.
As expected, this positive momentum in Bitcoin has flowed into other cryptocurrencies. Major altcoins mirrored Bitcoin’s surge, resulting in a significant increase in the overall cryptocurrency market capitalization. A by-product of the increase in cryptocurrency market capitalization has been the simultaneous movement of the Cryptocurrency Fear and Greed Index, which is now Towards the Threshold of Extreme Greed.
Fear and Greed Index Shifts to Extreme Greed
this Cryptocurrency Fear and Greed Index is a popular index that measures market sentiment on a scale of 0 to 100. The range is divided into a low end of extreme fear to a high end of extreme greed with a neutral area in between. A time of extreme fear is Characterized by oversold conditions and bearish market sentiment, which often occurs Buying Opportunities.
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On the other hand, when greed dominates, it usually signals Overbought conditions. This also brings up the possibility that a pullback or crash may be imminent, especially if there is a rapid shift from neutral greed to extreme greed.
The entire cryptocurrency market capitalization has seen steady inflows this week. According to CoinMarketCap, the total cryptocurrency market capitalization began this week at about $3.14 trillion. As of this writing, this number has risen to $3.57 trillion, equivalent to approximately $430 billion in inflows over the past five days. The 13.5% gain points to growing optimism as Bitcoin and some major altcoins now seek to return to new highs.
Recent inflows into the cryptocurrency market have moved the index from a neutral threshold at the start of the week to a greedy threshold at the time of writing. Particularly striking is the speed of the mood shift. As of now, the index is approaching the extreme greed threshold, an area that indicates the market may be entering overbought territory.
Where will Bitcoin price go from here?
The market’s ability to maintain its momentum and sustain greed depends on Bitcoin’s ability to maintain price Given its dominance in the market, its price exceeds $100,000. If the bulls manage to hold the $100,000 mark and establish it as solid support, this may mitigate the risk of extreme greed leading to overbought conditions and subsequent downward corrections.
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one Support above $100,000 Essentially resetting the Crypto Fear and Greed Index around this level. Failure to hold above $100,000 could validate the historical trend of extreme greed often leading to crashes.
At the time of writing, Bitcoin is trading at $101,420, up 1.6% in the past 24 hours.
Featured image created using Dall.E, chart from Tradingview.com
