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Data shows greed in the crypto market has reached seven-month highs as coins hit new all-time highs (ATH).
Crypto fear and greed index points to extreme greed
According to Arcane Research’s latest weekly report, the Fear and Greed Index has hit seven-month highs as the needle points to extreme greed.
The “Fear and Greed Index” is an indicator that represents the general sentiment of the crypto market on a numerical scale ranging from 0 to 100.
When the metric has values below 50, it means that there is, on average, fear among investors. Values below 25 indicate extreme fear. Such a feeling is usually seen after big corrections, and periods of extreme fear can turn out to be good buying opportunities.
While the needle pointing above 50 means the crypto market is starting to get greedy. Extreme greed occurs when values go above 75. Very high values near 100 may mean that there will soon be a correction so that investors cannot buy more at this point.
Here is a counter that shows what the current market sentiment is:
Fear and Greed Index Seems to Point to Extreme Greed at the Moment | Source: Weekly Arcane Research Update – Week 42
As the counter above shows, the crypto market seems to be extremely greedy right now as the indicator’s value stands at 76.
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A comparison with last week’s and last month’s values is also given below the counter, which were 75 (extreme greed) and 27 (fear) respectively.
The graph below gives a better idea of how the current values of the Fear and Greed Index compare to those in the past:
The values of the indicator over the last year | Source: Weekly Arcane Research Update – Week 42
Looking at the chart above, it becomes apparent that the Fear and Greed Index reached values of 84 this week, the highest in the past seven months.
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This peak was reached just a day after Bitcoin made its new ATH of around $ 67,000, but soon after the price suffered a correction. The chart below shows this BTC price trend:
BTC Price Continues To Fall After Creating New ATH | Source: BTCUSD on TradingView
The fear and greed index has also been hit in response to this drop in the price of Bitcoin, but nonetheless, stocks still remain in the category of extreme greed, which means the crypto market still expects that prices go up.
During the rally at the start of the year, stocks have always remained in the extreme greed category, and the corrections have caused only temporary drops in the indicator.
This means that if the market is to keep making new ATHs, market sentiment should remain greedy, otherwise the bull run may start to falter.
Featured image from iStock.com, charts from TradingView.com, Arcane Research
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