Bitcoin Fear & Greed Index Still Hasn’t Achieved an Extreme Value. Here’s What This Could Mean for BTC’s Price Recovery.

The indicator, which gauges the overall sentiment present among investors in the Bitcoin and wider cryptocurrency markets, is currently sitting at 75.

This metric is a useful tool for understanding the collective psychology driving the sector. It takes into account five key factors: volatility, trading volume, social media sentiment, market cap dominance, and Google Trends.

The indicator assigns a score between zero and hundred to represent the prevailing sentiment. Anything below 47 indicates fear, while anything above 53 suggests greed. Values in between correspond to a neutral mentality.

According to the latest reading, a sentiment of greed is present in the market as the index is sitting at 75. This mentality is also quite strong, being close to the threshold for extreme greed.

When the indicator crosses 75, it enters into this zone. There is a similar region on the fear side, called extreme fear, which occurs when the metric falls below 25.

The present value marks a slight improvement from a few days ago, but it remains unchanged from yesterday. This is interesting considering the cryptocurrency has only continued its strong recovery over the past day.

The chart below shows a record of the values of the Bitcoin Fear & Greed Index over the past year.

Historically, Bitcoin has tended to move in a way that goes against the expectations of the majority, with the probability of such an opposite move only rising the more sure the crowd becomes.

In line with this, tops and bottoms in the asset have generally occurred when the index has been in the respective extreme zone.

Tops last month and in March coincided with the Fear & Greed Index hitting 87 and 88, respectively, at the height of the bull rally.

It’s possible that the next top might occur at lower levels, but the past readings still provide some reference of when the sentiment starts becoming truly heated up.

BTC has furthered its run today and the indicator’s value is likely to be higher tomorrow, but the fact that the coin has been rallying towards its all-time high while the index has been sitting out of the extreme greed zone could be a positive sign for its sustainability.

At the time of writing, Bitcoin is trading around $104,800, up more than 11% over the past week.