The Bitcoin Fear and Greed Index hit an index score of 52 over the weekend, moving into neutral territory for the first time in three quarters.
The highly referenced bitcoin fear and greed index moved into neutral territory over the weekend after several months of fear.
On January 15, the index hit a neutral level of 52, the highest since April 5, 2022. The move follows a 24% gain for Bitcoin (BTC) over the past seven days
Market sentiment trackers hit a multi-year low of nine in June 2022. Despite hovering between 20 and 30 in the “extreme fear” category since then, it’s its longest of extreme fear in mid-2022, according to Cointelgraph They recorded the streak.
The Fear and Greed Index uses “momentum and sentiment from a variety of sources,” including current volatility, market movements and volume, social media and Google Trends data
The data from these sources is then used to summarize the emotional landscape about the BTC and crypto markets in order to create a specific number.
There are five categories ranging from extreme fear to extreme greed, the latter of which has not been seen since October 2021.
At the time of writing, the index has fallen back to 45, putting it back in the “fear” category, suggesting that confidence has yet to fully return
Meanwhile, BTC has seen the second-longest streak of profits in its history, with 12 days of profits this month. Assets are up 28% since the beginning of this year, wiping out all losses in the crash that followed the FTX collapse in early November 2022.
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This massive momentum has led to major gains in technical indicators such as the RSI (Relative Strength Index), which hit a four-year high in the daily timeframe
High RSI data can indicate that an asset is overbought and needs to be corrected.
Related: Bitcoin fails to persuade that the bottom is in with $12K is ‘still a possibility’.
Many analysts described the recent move as a bull trap but solid weekly closings provided some confidence that the momentum will continue.
Professional trader and chart guru Peter Brandt summed it up in a tweet on January 16:
“Any fool can make wild guesses about the market, so here’s my Dunes hat forecast. In reality, no one has a clue what a market will do. $BTC.”
At the time of writing, bitcoin was trading up 2.2% on the day to $21,165, according to Coingeco.