Bitcoin [BTC]: What the King’s Coin FOMO and FUD Indicators Suggest

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The volume of Bitcoins in the profit and loss ratio fell into the negative zone. Investors doubted a further rise in prices even though the fear and greed index rose.

Bitcoin [BTC] may have disappointed a ton of doubting Thomas after an impressive year-to-date performance (YTD). But as it stands at press time, the arm of defeat has been extended to investors who arrived late to the party.

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According to Santiment, the daily on-chain coin trading volume in terms of profit-to-loss ratio fell into the negative region for the first time in five weeks. This metric reveals whether trades in profits exceed those in losses or otherwise. At press time, the value was -0.145.

Source: Santiment

The cravings of the greedy

This condition implies that a significant number of investors bought BTC above the press time price. A simplification here means that fear of missing out has been triggered (FOMO) since the king coin attempted to reach $30,000 on several occasions.

Although BTC, as a speculative asset, has always had traders and investors torn between fear and greed, the condition tends to favor the latter. After breaking through the neutral zone last month, the emotional behavior of average investors has moved entirely out of the fear zone, which likely offers a buying opportunity.

Instead, the Bitcoin Fear and Greed Index rose to 64. The metric takes into account volatile price movements, dominance, and market momentum. At this point, that meant investors tended to be too greedy.

Source: lookintobitcoin

But over the past seven days, the index had remained around the same region. This breeds Fear, Uncertainty, and Doubt (FUD) as the BTC consolidation has been going on for quite some time. Additionally, the status at the time of writing aligns with a further correction that BTC has experienced in the past few days.

The sideways trend leads to skepticism

Meanwhile, the repeated rejection at $29,000 and the subsequent correction seemed to have dampened belief in further upside. This was taken from the weighted decline in sentiment at 0.646.

When this metric drops, it suggests that public opinion of the asset was rarely positive. But historically, prices are likely to rise when sentiment declines. However, this only happened when the weighted sentiment that combines positive and negative perceptions reached extremely low levels.

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Additionally, active Bitcoin addresses reneged on the momentum they had earlier in the year. The metric measures user interaction and growth considering the transaction on the network.

At press time, 30-day active addresses were 17.65 million. But generally there have been no major influxes. Often, this situation is associated with low demand, which could lead to bearish momentum in the market.

Source: Santiment

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