Bitcoin market sentiment has reached levels not seen since its price reached $69,000 in mid-November 2021, according to the Crypto Fear & Greed Index. The index, which measures market sentiment on a scale of 0 to 100, is currently at 72, indicating a state of “greed” among investors. This is a significant increase from its previous score of 50, which was considered “neutral”.
The rise in market sentiment comes in the wake of growing excitement around the potential approval of BlackRock’s spot Bitcoin exchange-traded fund (ETF) by the United States Securities and Exchange Commission (SEC). Speculation about the approval has intensified, driving up demand for Bitcoin and pushing its price above the $35,000 mark on October 24th. This marked the largest single-day rally for Bitcoin in over a year, with a 14% gain.
The Crypto Fear & Greed Index calculates its score by weighing six key performance indicators: volatility, market momentum and volume, social media sentiment, surveys, Bitcoin’s dominance, and market trends. These factors provide a comprehensive assessment of market sentiment on a daily basis.
The last time the index reached a score of 72 was on November 14th, 2021, just four days after Bitcoin reached its all-time high of $69,044. This suggests that investor sentiment is currently reminiscent of the optimism observed during the peak of the Bitcoin bull run.
However, it’s worth noting that the Crypto Fear & Greed Index has also experienced its lowest-ever score of 7 on June 16, 2022, following the collapse of Do Kwon’s Terra Money ecosystem. This incident triggered a series of negative events in the crypto market, leading to a significant drop in market sentiment.
Despite the potential risks associated with cryptocurrency investments, the excitement around spot ETFs has led crypto investment firm Galaxy Digital to predict a significant increase in Bitcoin’s price. Galaxy Digital believes that if a spot ETF is successfully approved, Bitcoin’s price could surge by more than 74% in the first year.
The impact of spot ETFs on the cryptocurrency market remains uncertain, as regulatory approval is still pending. Nevertheless, the recent surge in market sentiment indicates a growing optimism among investors. This renewed interest in Bitcoin could potentially lead to further price increases and market growth.
In conclusion, the Crypto Fear & Greed Index shows that market sentiment for Bitcoin has reached levels not seen since its all-time high. The anticipation of BlackRock’s spot Bitcoin ETF approval has fueled investor optimism, leading to a significant increase in Bitcoin’s price. While the market remains volatile, crypto investment firm Galaxy Digital predicts considerable growth if a spot ETF is approved. Overall, the sentiment in the cryptocurrency market appears to be leaning towards optimism and greed.