The Crypto Fear and Greed Index continues to give a “Extreme Greed” reading despite the Bitcoin price pulling back. The leading cryptocurrency fell below $ 33,700 for a short time on January 20.
Fear and greed index
The Fear and Greed Index has suggested ‘Extreme Greed’ in the Bitcoin market since the beginning of November. However, trust seems to be weakening now.
Alternative.me’s Crypto Fear and Greed Index has been reading ‘Extreme Greed’ for months.
Bitcoin Fear and Greed Index is 78 – Extreme Greed pic.twitter.com/riDMgGsR31
— Bitcoin Fear and Greed Index (@BitcoinFear) January 20, 2021
The indicator uses volatility, social media engagement, market dominance and Google Trends to assess investors’ sensitivity to cryptocurrency.
Even significant retreats in bitcoin prices did not dampen enthusiasm. At 78/100, the indicator’s January 20 reading was still above the threshold of “Extreme Greed”.
At the time of the reading, BTC had dropped by more than $ 1,000, starting from the previous day’s high of $ 37,600. This decline continued as the cryptocurrency fell to local lows of $ 33,700 on January 20.
Similarly, on January 11, just after BTC’s all-time high of almost $ 42,000, Bitcoin fell below $ 32,000.
Despite this decline of about 25%, the index gave a “Extreme Greed” reading of 84/100 on January 12th.
It is not surprising that the market remains optimistic even in the face of such pullbacks. Bitcoin, which surpassed its all-time high price earlier this month, reached $ 42,000 after numerous bullish developments.
Increased corporate interest, such as institutional investments such as MicroStrategy and acquisitions from Bitcoin MassMutual, highlighted the asset’s growing appeal among a different class of investors. Similarly, former Bitcoin nemesis JPMorgan was on the rise in the digital asset and predicted that its price could exceed $ 146,000.