Data shows the Bitcoin investor sentiment has recently improved, but buyers are still reluctant as fear continues in the market.
Bitcoin Fear And Greed Index Points To A Fearful Sentiment
As per the latest weekly report from Arcane Research, the BTC market sentiment hit a high of 34 last week, but now it has once again fallen to just above extreme fear territory.
The “fear and greed” index is an indicator that measures the general sentiment among investors in the Bitcoin market.
The metric uses a numeric scale that runs from zero to hundred for representing this sentiment. All values above fifty imply greed, while those below the threshold suggest fear.
Values towards the end of the range of above 75 and below 25 signify sentiments of “extreme greed” and “extreme fear,” respectively.
Historically, tops have tended to form during extreme greed, while bottoms have taken place during the periods with the latter sentiment.
Because of this fact, some traders believe it’s best to sell while the market is extremely greedy and buy when investors are extremely fearful.
“Contrarian investing” is a trading technique that echoes this idea. The famous Warren Buffet quote sums it up: “be fearful when others are greedy, and greedy when others are fearful.”
Now, here is a chart that shows the trend in the Bitcoin fear and greed index over the past year:
The value of the indicator seems to have surged up during recent weeks Source: BTCUSD on TradingViewFeatured image from Kanchanara on Unsplash.com, charts from TradingView.com, Arcane Research