Bitcoin Price Has More Upside: Fear and Greed Index Shows

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The Crypto Fear and Greed Index indicates continued fear in the crypto market despite the recent rebound. Bitcoin price was trading at $17,870 on Wednesday, slightly higher than the year-to-date low of $15,520. BTC in GBP was trading at 14,370 while the BTC/EUR price was trading at 16,600.

What is the Fear and Greed Index?

The financial market is mainly driven by fear and greed. When things are going well, investors tend to get greedy and buy more. We have seen this well when crypto stocks and memes come back in 2021.

On the other hand, investors tend to get scared when things aren’t going well. Therefore, the fear and greed index is a tool that provides an estimate of the state of affairs between the two.

The most widely used index was created by CNN Money and is commonly used in the stock market. It examines market sentiment by identifying the performance of key areas such as stock market breadth and strength, call and put options, market dynamics, and demand for safe haven, among others.

Read a review of the best bitcoin exchanges.

The Bitcoin Fear and Greed Index aims to replicate this performance in the crypto market. It examines market volatility, social media activity, Google dominance and trends. It varies between 0 (very fearful) and 100 (very greedy).

In some cases, experts recommend buying when it is in the fear zone and selling when it becomes extremely overbought. This is based on a popular Warren Buffett quote: buy when everyone’s scared and run when they’re greedy.

However, based on its performance, Bitcoin price tends to do well when the fear and greed index is in the greed range and vice versa. This happens because it usually has momentum when investors are greedy.

Therefore, with the index being in the fear zone of 30, it means that it is improving since it was at 24 last month. This means that the coin could continue to rise for some time.

bitcoin price prediction

The 4H chart reveals that the price of BTC has seen a slow bullish comeback over the past few days. During this period, it formed an inverted head and shoulders, which is a bullish sign. The coin is also above the 25- and 50-day moving averages, while the RSI has moved above the overbought level.

Therefore, due to the H&S pattern, I suspect Bitcoin will continue higher as buyers target key resistance at $19,550. This price is derived by measuring the distance between the head and the shoulder

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