The crypto market has fluctuated strongly in the past few weeks, but last week’s rally finally reached the territory of greed. However, as the rally slowed and the inevitable market correction began, sentiment began to turn negative again. This caused the Index of Fear and Greed to be reversed from the territory of greed and finally ended neutrally. Now the market remains at a standstill waiting for the next move.
Index of crypto fear and greed in a neutral state
The crypto fear and greed index helps map how investors feel about the market. At the moment, it is neither good nor bad that the index is in neutral territory. It is important to note that the sentiment led far to greed as bitcoin reached $ 47,000, but now most of that positive sentiment seems to have disappeared after bitcoin made a slight decline that brought it back to the $ 46,000 region.
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With the fall of bitcoin, the whole market naturally collapsed along with it. This inevitably returned the total market capitalization to a low $ 2 trillion. However, the market began to recover again, which would explain why the index did not completely slip into the region of fear.
Last week, the index ended in greed, which is a huge contrast to the extreme fear in which the index closed the previous month. The current location of the index at neutral 52 suggests that investors are not making any important moves in the market. Buying and selling is mostly balanced and investors are not moving in any direction at the moment.
This is easy to understand given that the market has generally slowed to a creep in terms of momentum. Top cryptocurrencies like Bitcoin and Ethereum continue the trend in the same region, struggling to come above the next significant points of resistance. While the rest of the market is waiting to follow what market leaders are doing.
However, as most markets continue to trade in the green, Fear & Greed is prone to greed despite being in neutral territory. With something that looks like another point of rejection for the crypto market, the index could return to greed before the end of the week.
Market cap at $2.098 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Stears Business, chart from TradingView.com