The popular sentiment indicator in the Bitcoin market, Fear and Greed (“Fear and Greed”), left the fear zone, overcame the neutral zone and reached the greed zone for the first time since March 30 last year.
The improvement in market sentiment is associated with a significant increase in the rate of the first cryptocurrency. Usually, when the indicator is in the greed zone, one should buy BTC with caution. But at the moment, the index is only 55, which is far from the limit. The best time to buy bitcoin is when the index is below 25.
To compile the Fear and Greed index, analysts use a variety of data, including the volatility of the first cryptocurrency, social media posts, and other factors. On January 16, the indicator left the fear zone, and the category of extreme greed has not been observed since October 2021.
The growth of the first cryptocurrency was helped by the publication of the Consumer Price Index in the United States – the indicator began to decline, which means the Fed may soften its policy. Accordingly, investors began to invest in risky assets, including Bitcoin.
Earlier, analytics firm Glassnode noted that more than 97% of short-term buyers of bitcoin are in profit. This may put pressure on the rate of the first cryptocurrency.
Source: Bits
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