Will Bitcoin Enter the “Extremely Greedy” Zone Like It Was in 2019 and 2021?

Investors have been closely monitoring market sentiment towards Bitcoin, and the inclusion of the Fear and Greed Index will help them better identify current trends. The Fear and Greed Index is a measure of overall market sentiment by examining a variety of factors, including market volatility, trading volumes, media sentiment, social and search patterns.

On-chain data analyst Glassnode recently tweeted that the Crypto Fear and Greed Index is now firmly in the “greed” zone. This shows that market participants are currently optimistic about Bitcoin’s prospects and are willing to take more risks in the hope of higher returns.

The question for many investors, however, is will this rally push Bitcoin into “extreme greed” territory like 2019 and 2021, or will it be overwhelmed by resistance like March 2020 or the leverage purge in 2022?

Will Bitcoin Return to the Extreme Greed of 2019 and 2021?

Source: Glassnode

To understand the implications of these scenarios, it is important to consider the historical context. In 2019, Bitcoin experienced a strong bull market, which rose from around $4,000 to nearly $14,000 thanks to a combination of factors such as increased institutional adoption and project announcements. Facebook’s Libra and growing acceptance of Bitcoin as a legitimate asset.

However, this rally was short-lived, with Bitcoin quickly falling back to previous lows.Fear and Greed Index Shows Investors Are Getting Too Greedy, a Sign of an Imminent Market Correction

In 2021, Bitcoin has once again experienced a big rally, this time driven by a combination of factors such as increased institutional adoption and the announcement of its acceptance as a payment method. Tesla sees it as a hedge against rising inflation. The Fear and Greed Index reached extreme greed, and the price of Bitcoin soared to nearly $65,000.

However, this rally was also short-lived, with Bitcoin quickly falling back to previous levels. The Fear and Greed Index indicates that investors have become too greedy and the market is about to correct.

So, what does this mean for the current market? The Fear and Greed Index is currently in the “greed” zone, but it’s important to remember that it doesn’t necessarily help Bitcoin continue to rise. If investors get too greedy and push Bitcoin into extreme greed territory, we could see a similar bull run in 2019 and 2021, but the market will quickly correct itself.

On the other hand, if the market can break resistance and resume its upward trajectory, we could see Bitcoin reach new heights. The future cannot be predicted with precision, but by tracking the Fear and Greed Index and other indicators, investors can make informed decisions about their Bitcoin holdings.

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