Crypto Fear and Greed Index Surges to Its Peak Since November 2021
The Fear and Greed index in the cryptocurrency market has seen a significant rise, reaching 79 points out of 100. This indicates a shift in market sentiment towards the “extreme greed” sector. This level is considered extremely high and has not been seen since early November 2021, which was just before Bitcoin hit its all-time high of $69,000.
Fear and greed are two emotions that often influence investor behavior in the crypto market. Fear is typically accompanied by massive selling and panic, while greed leads to active buying of cryptocurrencies. The latter can result in excess demand and artificially inflated coin prices.
The Fear and Greed index previously hit a minimum value of 9 points in June 2022, following the collapse of the UST stablecoin from Terraform Labs. This showed the extreme fear among crypto investors. During FTX’s bankruptcy filing in November 2022, the index ranged between 23 and 30 points.
By mid-October 2023, the index had recovered to a neutral 52 points. In November and December, the index continued to grow in the “greed” zone, pending the approval of spot Bitcoin ETFs. Finally, on January 9, sentiment in the crypto market reached the “extreme greed” zone for the first time in over two years.
At the same time, the price of Bitcoin has reached its highest level since November 2021, surpassing $50,000 on February 12. Most of the top 10 crypto assets have also shown growth in terms of capitalization, according to CoinMarketCap.
Overall, the Fear and Greed index’s recent rise and the positive performance of Bitcoin and other crypto assets indicate a growing optimism and investor confidence in the cryptocurrency market.
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