Markets
Cryptocurrency Investors Get Greedy as Bitcoin Surpasses $66,000
The cryptocurrency market is once again full of greed following Bitcoin (BTC)’s latest rally to a three-week high of over $66,000.
Data from Alternative.me shows that the Crypto Fear and Greed Index currently stands at 74, indicating a period of greed among digital asset investors.
Cryptocurrency investors are greedy
The increased feeling of greed in the cryptocurrency market follows a period of neutrality among market participants. CryptoPotato reported earlier this month the Fear and Greed Index stood at 54 for the first time since January, representing neutral sentiment among investors, while BTC traded in a range of $57,000 to $60,000.
At the time, BTC and the broader cryptocurrency market experienced increased volatility and a massive loss in total market capitalization. On one occasion, BTC fell below crucial support levels, plunging 11% in 36 hours.
The crash drained the cryptocurrency market of more than $200 billion, leaving a trail of ruins among altcoins and meme coins. Digital asset investment funds in particular have been hit, with some networks recording consecutive weeks of outflows.
However, the tide has turned changed this week, with bulls taking the reins on Monday. After hovering around $61,000 over the weekend, BTC rose to $63,000 on Monday, before persisting to $64,000 on Wednesday. At the time of this writing, the leading cryptocurrency was changing hands to $66,200, up 5% over the past seven days.
Bitcoin’s upward trajectory has extended to the spot market for Exchange Traded Funds (ETFs), with inflows reaching record levels for several weeks. On Wednesday, flows into ETFs reached $303 million, a figure last seen on May 3. saw inflows totaling $257 million. The two consecutive days of substantial inflows contrast with flows seen over the past two weeks, which are mostly below $100 million.
What happens next?
For those who don’t know, the Fear and Greed Index determines investor sentiment by analyzing several factors, including market momentum, volatility, bitcoin dominance, trends, and social media. On a scale of 0 to 100, 0 indicates extreme fear, 50 indicates neutrality, and 100 indicates extreme greed.
With the index at a greedy point, a further market rally could push it into the extreme greedy zone. Unfortunately, this would give room for a correction, which is typical for cryptocurrency markets.
Regardless, the sway liquidity entering the market could push BTC out of its current price range to a higher level.