Data shows the Bitcoin Fear & Greed Index has surged back into the neutral zone after the recovery rally in the cryptocurrency’s price.
The index uses a numerical scale running from zero to hundred for representing this sentiment. All values above 53 correspond to greed among the investors, while those below 47 to fear. The region between the two cutoffs naturally corresponds to a net neutral mentality.
Now, here is how the current Bitcoin market sentiment is like, according to the Fear & Greed Index:
As is visible above, the indicator has a value of 51, which suggests the trader sentiment is almost exactly in the balance right now. This is a notable change in market mood compared to just a few days ago.
As displayed in the chart, the Fear & Greed Index was inside the fear zone during the past few days. The despair among the traders was a result of the bearish price action that BTC had recently faced.
Historically, the extreme sentiments have been quite significant for Bitcoin and other cryptocurrencies, as they are where major tops and bottoms have tended to form. The relationship has been an inverse one, however, meaning extreme fear is where bottoms form, while extreme greed facilitates tops.
Since the extreme fear low earlier in the month, BTC has been on the way up, a potential indication that the contrarian signal of the sentiment may once again be in action.
The cryptocurrency has extended its recovery in a sharp manner during the last couple of days, which may be a potential reason why the Fear & Greed Index has surged back to the neutral territory now.
Though, for now, Bitcoin traders are still undecided on whether bullish action will follow next. It now remains to be seen whether they will embrace greed, or continue to be hesitant about the recovery.
At the time of writing, Bitcoin is floating around $114,900, up 3.6% over the last seven days.
