- Bitcoin’s price has rallied over 13% year-to-date, breaking above $50,000 in mid-February which signals a shift to “extreme greed” among investors according to the Crypto Fear and Greed Index
- This positive momentum comes on the heels of the launch of spot Bitcoin exchange-traded funds (ETFs) in the US last month, with Bitcoin’s surge suggesting some short-term selling pressure has abated
- The Crypto Fear and Greed Index incorporates volatility, market momentum, social media trends and other indicators to gauge overall investor sentiment in the crypto market, though it peaked in early January amid the ETF hype
The Crypto Fear and Greed Index, a tool that tracks market sentiment in the crypto space, has surged to 79 – its highest level since November 2021 when Bitcoin was nearing its all-time high of $69,000. This spike in the index signals a shift to “extreme greed” among investors as Bitcoin’s price breaks back above $50,000.
Recent Bitcoin Rally
Bitcoin’s price has added around 13% year-to-date, buoyed by solid momentum over the past couple months. The leading cryptocurrency cleared $50,000 on February 12th, sparking the latest leg higher for the Fear and Greed Index.
This momentum comes on the heels of the launch of spot Bitcoin exchange-traded funds (ETFs) in the US last month. Some predicted investors would sell the news of ETF approval, but Bitcoin’s surge suggests some of that short-term selling pressure has abated.
Calculating Crypto Sentiment
The Crypto Fear and Greed Index incorporates several factors to gauge market sentiment:
- 25% – Volatility
- 25% – Market Momentum
- 15% – Social Media Trends
- Other Indicators
The index peaked at 76 in early January amid the ETF hype. Despite hitting multi-year highs, individual crypto traders should still do their own research instead of solely relying on sentiment indicators.