Data shows the Bitcoin fear and greed index has now reached the highest level since the peak in November as the price of the crypto rallies up.
Bitcoin Fear And Greed Index Now Points At “Greed”
As per the latest weekly report from Arcane Research, the BTC fear and greed index has surged to values of greed sentiment this week.
The “fear and greed index” is an indicator that tells us about the current general market sentiment among Bitcoin investors.
The metric uses a numeric scale that travels from one to hundred for representing this sentiment. All values above fifty signify that investors are greedy at the moment. While those below the cutoff suggest a fearful market.
Values above 75 and below 25, that is, the values toward the ends of the range, represent extreme greed and extreme fear, respectively.
Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year:
Looks like the value of the indicator has surged up recently | Source: Arcane Research's The Weekly Update - Week 12, 2022
As you can see in the above graph, the Bitcoin fear and greed index has sharply risen over the past week. The indicator now has a value of 56, which shows the market is getting greedy.
This value of the metric is now more than in any other period in the year 2022 so far, and is the highest since the peak in early November of last year.
Related Reading | Glassnode’s RHODL Ratio May Suggest Bitcoin Market Is Near Capitulation
Historically, Bitcoin peaks have tended to happen while the sentiment is that of extreme greed, and bottoms have formed during periods of extreme fear.
There is a popular trading technique called “contrarian investing” that makes use of this fact. Traders following this methodology think that the best time to buy is during extreme fear, while extreme greed is when one should sell.
Related Reading | Bitcoin Weekly Momentum Flips Bullish For First Time In 2022: What Data Says
This famous quote by Warren Buffet sums up this philosophy: “Be fearful when others are greedy, and greedy when others are fearful.”
So, following the line of thinking of contrarian investors, the current market sentiment turning greedy may be a sign that you should now start getting fearful instead.
BTC Price
At the time of writing, Bitcoin’s price floats around $47.3k, up 12% in the last seven days. Over the past month, the crypto has gained 26% in value.
The below chart shows the trend in the price of the coin over the last five days.
The price of Bitcoin seems to have surged up over the past few days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research
Credit: Source link
