Crypto Fear & Greed Index Eyes Greed Zone Despite Bitcoin (BTC) Price Dump

News
Thu, 06/04/2020 - 11:55
Vladislav Sopov
After the upsurge past $10,300, Bitcoin (BTC) has revisited $9,500-$9,600 waters in a painful correction. But even this fall hasn't stopped the Crypto Greed&Fear Index!
Cover image via stock.adobe.com
Contents

The crypto Fear & Greed Index calculated by the Alternative software company revisited a three-month-high at 56 on Jun 2, 2020. Since this indicator lags one day behind the actual market sentiment, it reflected the bullish inspirations of the first day of Summer.

Big greed is on the horizon

This indicator stopped its growth only for one day after the painful Bitcoin (BTC) price drop of June 2nd. Today it is surging again reaching 54 points, which is interpreted as a 'Neutral' market sentiment.

Image by Alternative

It looks like it won't take long for the Fear & Greed Index to revisit the 2020 local high at 65 that was reached on February 13, 2020. After Black Thursday and the tremendous crypto market bloodbath, this index stayed in the Extreme Fear Zone for a long time, touching a local low at 8. 

It has been slightly outperformed by a similar CNN Business Fear & Greed Index. This investor sentiment indicator has already entered the Greed territory and is now sitting at 61 points.

Seasoned analyst and trader Crypto Birb mentioned this process in his Twitter. It looks like he is treating it as an indicator of 'Hope' or a 'Belief' phase of the market sentiment cycle.

Image via Twitter

Is 'decoupling' on borrowed time?

One rule has worked perfectly amidst the ongoing market recession. Analyst Charles Edwards of Capriole Investments outlined that Bitcoin (BTC) is only correlated with stocks in times of extreme fear and extreme greed.

That said, we need to prepare ourselves for the impressive crypto market capitalization rally, since the stocks' bull run is nowhere near its end.

The crypto Fear & Greed Index by Alternative utilizes different types of market inputs to determine the sentiment of investors. It tracks market volatility, market volume, social media tendencies, Bitcoin (BTC) price dominance and Google Trends indicators for crypto-focused searches.

Previously, the Alternative also used data from surveys, but this section has been switched off.

About the author

Blockchain Analyst & Writer with scientific background. 5+ years in IT-analytics, 2+ years in blockchain.

Worked in independent analysis (Crypto Briefing) as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)

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