The concern and greed index means that Bitcoin isn’t out of the woods but. The carefully watched index hints that the present bounce in BTC and different cryptocurrencies may very well be short-term. Bitcoin value surged to $18,300 for the primary time since November. It stays about 10% above the bottom degree this 12 months.

What’s the Concern and greed index?

The concern and greed index is a sentiment software that appears at a number of gauges in its research of the state of the market. The primary identified index was created by CNN Cash and is without doubt one of the hottest instruments available in the market.

In line with CNN, the index measures the state of the market by contemplating a number of gauges like market momentum, inventory value energy, inventory value breadth, put and name choices, market volatility, secure haven demand, and junk bond demand.

Various.me developed an analogous software that focuses on the crypto market. It appears to be like at market volatility, market momentum, social media, dominance, and developments. Whereas these measures are essential, I consider that they don’t seem to be as exhaustive as these offered by CNN Cash.

The concern and greed index ranges from 0 to 100. 0 signifies that traders are extraordinarily fearful whereas 100 signifies that they’re extraordinarily grasping. In principle, traders should purchase when it’s within the concern degree and vice versa.

Buyers are nonetheless fearful

The concern and greed index presently stands at 25, which is an indication that traders are nonetheless fearful. Which means that long-term traders can begin accumulating now. 

Nevertheless, generally, shopping for when traders are fearful could be dangerous. As a substitute, I at all times advocate shopping for when it enters the greed degree. In such a scenario, it normally means that there’s momentum happening.

Buyers are fearful due to the rising concern of contagion within the crypto trade following the collapse of FTX. The US has arrested and charged Sam Bankman-Fried with quite a few crimes, together with cash laundering and conspiracy. 

The following key catalyst for Bitcoin value would be the upcoming rate of interest choice by the Federal Reserve scheduled for Wednesday. Economists count on that the financial institution will hike rates of interest by 0.50% in its closing assembly of the 12 months. A hawkish assertion will likely be bearish for Bitcoin costs.