- The Bitcoin market is in an extremely greedy condition.
- Traders use the Fear and Greed Index to predict future market behavior.
- BTC is close to $100K, complicating the potential outcome of technical analysis.
The Bitcoin market shows extreme greed, according to Into The Cryptoverse founder Benjamin Cowen. In an X post, the crypto analyst shared a screenshot of the Bitcoin Fear and Greed Index, tracking its trajectory over the past six years.
Cowen’s post highlighted the sentimental metric’s link with BTC’s price development since 2018, indicating the evolution of the Bitcoin market sentiment with price changes. The shared chart exposed the real metric’s behavior compared to the empirical analysis of how the market should respond, depending on the prevailing investors’ sentiment.
The Fear and Greed Index and Bitcoin Price
Typically, Bitcoin traders use the Fear and Greed Index to predict market behavior. The index ranges from 0 to 100, with 0 representing extreme fear and 100 representing extreme greed. Traders use this to identify overbought or oversold conditions.
Read also: Bitcoin Fear and Greed Index Hits Yearly High Amid Price Rally
At 84, traders consider the Bitcoin market to be in extreme greed, with investors flooding into the market for the Fear Of Missing Out (FOMO). Under normal circumstances, Bitcoin’s upsurge would have halted or at least slowed down. However, Cowen suggests there may be exceptions, especially during a strong bull run. External factors like macroeconomic policies could drive further gains and sustain extreme greed.
Market Sentiment and Potential Price Action
Currently, market sentiment suggests the Bitcoin rally may be losing momentum. Besides extreme greed, BTC is nearing the $100,000 psychological barrier, where many traders may take profits. However, this barrier could trigger different reactions depending on BTC’s behavior.
Historical Bitcoin behavior shows that breaking above such a level with significant momentum could lead to a new rally phase. Hence, instead of the expected pullback, BTC could continue higher, engaging in a parabolic rally that would open new price frontiers for the flagship cryptocurrency.
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