It’s been a rollercoaster ride for Bitcoin investors this year. The cryptocurrency reached a new all-time high of over $69,000 in November 2021 before crashing to a low of around $24,285 in June 2022. Now, Bitcoin has made a strong comeback, climbing over $28,000.
The surge in Bitcoin’s value has driven the Fear/Greed Index to its highest point of the year, with a reading of 68.
Bitcoin’s $28,000 Breakthrough Amplifies Fear/Greed Index
The Multifactorial Cryptocurrency Market Sentiment Analysis forum found that the Bitcoin Fear/Greed had hit its most incredible level since November 2021, with a value of 68, just as Bitcoin attained the $28,000 milestone for the first time since June 2022.
The index had not seen a value higher than 66 since that date. The Crypto Fear/Greed Index quantitatively indicates the existing emotions and opinions surrounding main digital currencies, particularly Bitcoin.
This index is measured from 0 to 100, in which 0 symbolizes “Extreme Fear” and 100 signifies “Extreme Greed.” The Fear/Greed Index dropped to 33 in the Amber zone from March 9 to 12th, showing a Fear period in the Bitcoin market.
However, only two days later, the index went up to 56 and has been in the Greed zone since then. According to Coingecko data, Bitcoin has experienced a surge of about 17% in the past seven days.
This has allowed its price to reach $28,000, which has not been seen since June 2022. The Bitcoin Fear/Greed Index inspired a Twitter user to comment, “FOMO time,” as the price of BTC has fluctuated between $27,120 and $28,500 in the last three days.
What’s Driving The Fear/Greed Index?
The most likely explanation is that investors are feeling increasingly optimistic about the future of crypto and are buying in to capitalize on the potential gains. Also, the recent collapse of some leading traditional banks, such as Silicon Valley, has propelled investors to consider digital assets as safe havens.
Many large companies such as Tesla and Square have started to invest in Bitcoin, giving additional confidence to investors about the long-term profits of this cryptocurrency. Furthermore, the emergence of decentralized finance (DeFi) has also been a significant factor driving the Fear/Greed Index to peak levels.
DeFi uses blockchain technology to develop financial services such as lending, trading, and insurance. Bitcoin’s increasing popularity among retail investors is another important factor contributing to the rise in the Fear/Greed Index.
Many investors are attracted to Bitcoin’s potential for high returns. Its decentralized nature makes it an attractive asset for those looking to diversify their portfolios.
These factors have combined to drive the Fear/Greed Index to its highest level in over a year. Whether or not Bitcoin can continue on its current trajectory remains to be seen. Still, for now, Fear/Greed are driving the market.
