Bitcoin (BTC) has flirted with the $100,000 mark over the past 48 hours as optimism about a rally higher engulfs the market. As a result, investors have become very greedy.
Data from the Crypto Fear and Greed Index, which tracks investor sentiment in the market, indicates that participants are in an extremely greedy phase. This is evident in the index rising above 90 to reach 94 for the first time in three years.
Investors are getting extremely greedy
The Fear and Greed Index gauges investor sentiment by analyzing several factors, including market volatility, social media trends, Bitcoin momentum and dominance. When the index is close to 0, it is generally a sign of extreme fear on the part of investors, while a number close to 50 signals market neutrality. When the number reaches 100, it indicates that investors have become greedy, and this often happens during brief or major rallies.
The last time the Fear and Greed Index reached 94 was in mid-February 2021. At the time, BTC was on an upward trajectory, hitting an all-time high above $47,000. Even during the last Bitcoin bull market peak in November 2021, the index stopped at 74 before returning to fear levels.
Similarly, bitcoin’s rally to an all-time high in March 2024 saw the index hovering around 81, indicating an extreme level of greed among investors. As the cryptocurrency hits $99,000 for the first time and is less than 2% away from $100,000, the level of investor greed has skyrocketed.
The index notably began to increase two weeks ago after the emergence of Donald Trump as the winner of the US presidential election and has remained above 70 since November 5.
Altcoin season coming soon?
Historically, BTC has seen major corrections shortly after the Fear and Greed Index indicated extreme greed among investors. The market is bound to cool down after being overheated. Analysts also believed that BTC needed a significant correction after this rally so that the uptrend could extend into 2025.
Additionally, altcoin season, which refers to a period when capital leaves BTC and flows into other cryptocurrencies, has always occurred when BTC is cooling off. As BTC declines and its dominance declines, investors typically turn to other assets, increasing their demand and, therefore, their prices. Therefore, it is safe to say that altcoin season is closer than ever as BTC will experience a correction soon.
Bitcoin Fear and Greed Index Hits 3.5-Year High: Is This Hurting BTC’s Chances of $100,000? appeared first on CryptoPotato.
