Over the weekend, the Bitcoin Fear and Greed Index reached a score of 52, the first time it had done so in three quarters.
After several months of anxiety, the highly regarded Bitcoin Fear and Greed Index entered neutral zone over the weekend.
The indicator peaked on January 15 at 52, which is neutral, marking its highest level since April 5. The move comes after a 24% increase in the BTC over the previous seven days.
In June 2022, the market sentiment tracker fell to a multi-year low of 9. Since then, it has remained in the "Extreme Fear" range of 20 to 30. Additionally, it recorded its longest stretch of intense dread ever in mid-2022.
The fear and greed index draws its "motions and attitudes from numerous sources," which include, among other things, data from Google Trends, social media, market volume and momentum, and current volatility.
Combining information from numerous sources, a simple figure is produced that expresses how people feel about Bitcoin and the cryptocurrency markets.
Extreme fear to extreme greed are represented by its five categories; the latter hasn't been seen since October 2021.
The index has fallen back to 45 as of the time of writing, dropping it back into the "Fear" category and indicating that confidence has not yet fully recovered.
Bitcoin Fear and Greed Index is 45. Neutral
— Bitcoin Fear and Greed Index (@BitcoinFear) January 16, 2023
Current price: $20,879 pic.twitter.com/lnj3pd73XL
With a 12-day run this month, Bitcoin has seen its second-longest winning streak in history. Since the start of the year, the asset has increased 28%, wiping off all losses from the fall that followed the early November collapse of FTX.
Technical indicators like the RSI (relative strength index), which just reached its highest level on the daily timeframe in four years, have moved significantly as a result of the strong momentum.
High RSI values may indicate that a correction is overdue and that an asset is overbought.
Highest RSI levels on Daily $BTC chart for 4 years.
— Cold Blooded Shillver (@ColdBloodShill) January 15, 2023
Each of the prior 3 touches of the 90 level responded as follows:
Touch 1: BTC continued +18% higher before correcting -12%
Touch 2: BTC continued +16% higher before correcting -21%
Touch 3: No BTC gain and -31% correction pic.twitter.com/swQSLqATIi
A strong weekly close has given some reason to assume the momentum will continue, despite the fact that many analysts have called the recent advance a bull trap.
$BTC Weekly
— The Wolf Of All Streets (@scottmelker) January 15, 2023
You could not dream up a more bullish weekly candle. pic.twitter.com/fv66u76ujV
Peter Brandt, a seasoned trader and expert in charts, summed it up in a tweet on January 16:
“Any idiot can make wild guesses about markets, so here is my dunce-hat prediction. In reality, nobody has a clue what any given market will do. $BTC.”
At the time of writing, Bitcoin was trading up 2.2% on the day at $21,1652.
