Data shows the Bitcoin trader sentiment has hit a net neutral level as the consolidation in the cryptocurrency’s price has continued.
Bitcoin Fear & Greed Index Is Currently Exactly In The Balance
The “Fear & Greed Index” refers to an indicator created by Alternative that keeps track of the average sentiment present among the traders in the Bitcoin and wider cryptocurrency markets.
This index uses a numeric scale that runs from zero to hundred for representing the market mentality. All values below the 47 mark imply the investors are sharing a sentiment of fear, while those above 53 suggest the presence of greed in the market. The region in-between the two cutoffs corresponds to a neutral sentiment.
Besides these three main sentiments, the metric also has two special territories known as the extreme fear and extreme greed. The former occurs when the index grows below 25, while the latter above 75.
Here is how the current Bitcoin market sentiment is like according to the Fear & Greed Index:
Looks like the index has a value of 50 at the moment | Source: Alternative
As is visible above, the indicator has a value of 50, which means the investors as a whole share an exactly neutral sentiment right now. The index has arrived at this balance following a period of fluctuations.
Below is a chart that shows how the Bitcoin Fear & Greed Index has changed recently.
The value of the metric appears to have registered a sharp plunge over the past couple of weeks | Source: Alternative
The indicator ended January inside the extreme greed zone, but February kicked off with a rapid deterioration in sentiment as the index plunged all the way into the fear region.
But it would appear that the investors are now neither bullish nor bearish on the cryptocurrency, considering that the metric is back inside the neutral territory. The uncertainty among the investors is likely a product of the long consolidation that the asset has been witnessing recently.
Historically, Bitcoin has often tended to move in the direction that’s the opposite of what the crowd is expecting. Major tops and bottoms have generally occurred during the extreme sentiments, as these regions are where the investors are the most sure of the cryptocurrency’s trajectory.
With the trader mentality being perfectly in the balance right now, though, BTC theoretically has equal potential to run in either direction. In such a market, it’s possible that the consolidation of the asset will only lengthen until some sort of news arrives that swings opinion one way or the other.
BTC Price
At the time of writing, Bitcoin is trading around $95,700, down around 2% over the last seven days.
Looks like the price of the coin has been moving sideways in recent days | Source: BTCUSDT on TradingView
Featured image from Dall-E, Alternative.me, chart from TradingView.com
