The Crypto Worry and Greed Index, a monitoring software for market sentiment in crypto, has surged as excessive as 79 out of 100, hitting a degree not seen since Bitcoin peaked at $69,000 in November 2021.
The rise, noticed on February 13, comes as Bitcoin surpassed the $50,000 mark a day earlier.
Crypto Worry and Greed Index Hits ‘Excessive Greed’
For the primary time in additional than two years, the Crypto Worry and Greed Index is within the “excessive greed” zone, which occurs when the worth of the index exceeds 74.
Beforehand, the Index reached excessive ranges of “greed,” touching 76 on January 11 amid the thrill surrounding the potential approval of spot Bitcoin exchange-traded funds (ETFs) in the US.
The latest improve in greed happens a month after the launch of U.S. ETFs, which means that the short-term promoting related to the approval information of these monetary merchandise has subsided. Cathie Wooden, CEO of ARK Make investments, had beforehand anticipated that traders may “promote the information” shortly after approval however emphasised that it could be a short lived phenomenon.
The present “excessive greed” indicator comes as Bitcoin hit $50,000 yesterday, with solely round 13% of the overall provide now held at a loss.
Primarily based on information from Glassnode, roughly 87% of Bitcoin was acquired beneath the $48,000 threshold. There may be additionally a notable focus of short-term holders, outlined as these holding for lower than 155 days, clustered inside the $40,000 to $45,000 vary. As for long-term holders, they primarily represent the remaining 13% of the provision held in a loss place.
The Crypto Market Sentiment Has Been Bettering
In June 2022, following the collapse of the UST stablecoin from Terraform Labs, the Crypto Worry and Greed Index plummeted to a minimal worth of 9 factors, indicating the intense concern prevalent amongst traders throughout that point.
Subsequently, when FTX filed for chapter in November 2022, the index ranged between 23 and 30 factors, exhibiting concern.
Nonetheless, by mid-October 2023, the sentiment started to recuperate alongside BTC’s value, with the index reaching a impartial degree of 52 factors. As November and December took place, the anticipation surrounding the potential approval of spot Bitcoin ETFs fueled additional progress within the “greed” zone of the metric.
Notably, the Crypto Worry and Greed Index is derived from varied indicators that affect the conduct of merchants and traders, together with metrics corresponding to Google Tendencies, surveys, market momentum and dominance, social media traits, and market volatility.
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