Why is Crypto Down? The crypto Fear and Greed Index is stirring interest as a favored crypto indicator; what does it mean for crypto trading?
In the last 18 days, the Crypto Fear and Greed Index has gone from greed to extreme fear and settled at neutral. The market is clueless, wandering aimlessly through its own chaos.
Investor attitudes are evolving, even as Trump’s pro-Bitcoin rhetoric hangs in the air like stale smoke.
The prevailing theory is that it’s over, at least the bull run. March was the hard top, and a halving front run was the correct prediction.
So, is there any truth to this?
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BTC Price Fluctuations and the Crypto Fear and Greed Index
Bitcoin has disappointed many in the last few months only because we expected a new all-time high by now.
From hitting $69,000-$70,000 days ago, hinting at support floating around there, to today’s $64,000 and bleeding. It’s total chaos.
Things to look for in the days ahead are the Federal Reserve’s FOMC meeting—rate cuts are still expected for September.
From "fear" yesterday to "greed" today, well done Jerome! 👊🏽 Trading day over for me. A red day but not terribly so. Next stop for $SPY is $560 if they run it. pic.twitter.com/2lSSrLTXJ9
— John (@market_sleuth) July 31, 2024
The Bitcoin Fear & Greed Index is at 57 today, signaling a stalemate. This indicator can be thought of as a pulse check, blending social media data, trading stats, and Google trends to predict market sentiment.
You’re supposed to sell the greed (and buy the fear) [wink wink]
It’s hard to explain where greed ends and the fear begins. The fear that we haven’t seen enough damage in the markets and for unforeseen reasons of any kind, including sickness, war, lawsuits from past business or sales, and so on and on, we could go further down.
The meme of chasing after money till you have ‘enough’ and drop off the cliff – it’s real.
Implications for Bitcoin’s Price Action
The good news is that Bitcoin loves to mess with expectations. It often peaks and crashes in the throes of extreme sentiment. As we shift from greed to neutral, a trend reversal could be brewing, flagged by the Fear & Greed Index.
Keep an eye on that index. When it screams greed, you should often be worried.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
