Based on the recent development, Fear and Greed spiked towards green as soon as Bitcoin (BTC) landed on the $23k mark. This is the first time since March 2022 that the token ended in the Greed zone. However, this can be linked to two possible reasons, with the first of them being the revival of the crypto market. The other possibility revolves around the price increase of Bitcoin during this month.
The economic crisis cast a shadow over the global economy, it is evident that Bitcoin broke the chains keeping it down. At the time of writing, Bitcoin (BTC) has unfortunately slipped back to the $22k mark. The token is currently trading for almost $22,965. Keeping that in mind, the token has displayed a drop of a mere 0.31% as of today. However, the current trading price is still nearly 40% higher than what it was during the same time last year. The outstanding performance displayed by Bitcoin (BTC) this month made many believe that a bull market might not be away. When the inflation crisis is dealt with properly, it would become easier to aid another rally of Bitcoin.
However, another major factor that might greatly influence the price of Bitcoin (BTC) is the meetings of the FOMC. In the meetings conducted previously, interest rates were continuously increased to combat inflation. However, the current inflation rate sits at almost 4.5%, higher than it has even been in the previous 15 years.
The Bitcoin (BTC) Fear and Greed Index- Explained
The main purpose of the Fear and Greed index is to highlight the sentiments of investors towards the digital asset. The indicator was stuck within the Fear and Extreme Fear zones previously as a result of tough market conditions. However, it seems that the current spike might have turned everything in the favor of Bitcoin (BTC). Currently, the metric is pointed at 55, which states Greed.
It is necessary to remember that growing investor confidence must not be regarded as a catalyst for a bull run. The metric being in the Fear or Extreme Fear zones may highlight an optimal buying opportunity. Similarly, when it’s at Too Greedy, it could suggest that the market might be in for a complete correction.
