Bitcoin Surges Past $71,000, Ignites Market ‘Extreme Greed’

The oft-volatile Bitcoin market has certainly been making waves recently, registering a seismic surge past the $71,000 mark, according to available data. This noteworthy rise has sent the market sentiment rocking back into the territory of ‘extreme greed.’

For better context, there is a remarkably ingenius tool at the disposal of the savvy Bitcoin and wider cryptocurrency investor known as the “Fear & Greed Index.” This was developed by Alternative and effectively gauges the dominant sentiment within investors. Think of it as a barometer for market psychology – it scores sentiment on a scale of zero to a hundred, employing a range of factors such as volatility, trading volume, market cap dominance, Google Trends, and, quite tellingly, the sometimes fickle and often inflammatory opinion on social media.

TRUSTED PARTNER ✅

A score of 46 or less on this potent index, for example, suggests an investment climate of fear. That being said, a score exceeding 54 ostensibly indicates that there is an overarching sentiment of greed gracing the market. The grey area between these two extremes (47 to 53) comfortably houses a neutral sentiment.

Circling back to current affairs, it would appear that the latest score on this potent psychological barometer reads a rather substantial 81. To put that into context, this score misses the neutral territory by a significant margin, takes a deep dive into the deluge of greed, and scales the dizzying heights of a realm fittingly referred to as “extreme greed.”

The “extreme greed” and “extreme fear” zones host scores higher than 75 and lower than 25, respectively. Intriguingly, these zones have historically proven to be instrumental in shaping market dynamics, with Bitcoin and its cohort of digital assets often wickedly bucking the expectations of the majority. What’s more, these expectations tend to reach a fever pitch when the index resides in these manic extremes, consequently increasing the chances of the market doing a well-rehearsed pirouette against the popular sentiment.

Underpinning this phenomena are the recognisable tops and bottoms in Bitcoin’s price, which traditionally emerge when the cryptocurrency wades through these choppy extremes. Earlier this month, for instance, a surge of Bitcoin toward unprecedented highs was paralleled by the Fear & Greed Index’s foray into the lofty heights of extreme greed.

The zeniths of earlier this month were recorded at 90 and 88 on the index, respectively – a conspicuous correspondence that might suggest that the current extreme greed score of 81 could swath a path for yet another peak.

However, it’s all not an upward trajectory. Bitcoin did surpass the $71,000 level, only to slip slightly back towards $70,700. Yet these fluctuations appease the bullish investors as they see this temporal lull as a chance for Bitcoin to refuel before charging towards higher ground again. Following this trend, Bitcoin charted a meaningful recovery in this period, pushing the sentiment thermometer to soar from merely hot to sizzling once again, thus leaving the indicator pointing at extreme greed.

So, as we watch the digital rollercoaster that is the Bitcoin market, it seems the intense climb towards a fresh peak is all but unavoidable. Sit tight, fasten your seatbelts, it’s going to be an electrifying ride.