Bitcoin steps out of ‘the fear zone’ for the first time in nine months

The Bitcoin Fear and Greed Index reaches a score that does not rate the index as in the fear zone for the first time in nine months. With the current score of 52, we were back on neutral ground yesterday for the first time in more than three quarters. This has not yet started a new bull market, but it is certainly moving in the right direction.

Highest level since April 5

Bitcoin steamed up 24 percent in the past seven days and that of course has an impact on the Fear and Greed Index. This index measures the sentiment in the market. During June 2022, the index reached another multi-year low of 9 points. Since then, it has moved continuously between 20 and 30, which the index labels as extreme anxiety.

The index uses several sources to produce a score. This includes volatility, market momentum, volume, social media, Google Trends data and others. All together, the index then forms a number from 0 to 100 to determine the sentiment in the market. Interestingly, we often see Bitcoin peaking and bottoming at the extremes of the index. If the index goes towards 100, there is a good chance that we are at the top and vice versa.

Impressive series

Meanwhile, Bitcoin is on its longest positive streak in history. So far it has been on a green run of 12 consecutive days. Since the beginning of the year, Bitcoin is up 28 percent, cleaning up all the losses from the FTX scandal. Many technical indicators indicate that Bitcoin’s run should slowly come to an end. For example, the RSI (relative strength index) which hit its highest level in four years on the daily time frames.

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A high RSI can mean that an asset is overbought and a correction may be imminent. That correction must undoubtedly come at some point, because an asset cannot only go up in a straight line. So don’t panic if you’re still on the sidelines at this point and feel like you’re missing the boat. Those are often the times when you make wrong decisions. Never let your emotions drive you crazy.

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