For the first time in three months, the Bitcoin Fear and Greed Index has moved into the “greed” zone, indicating a renewed appetite for risk in the markets. This development comes on the back of Bitcoin’s price approaching its highest level in two months, supported by global geopolitical factors. While the index reflects growing confidence, it also raises the possibility of a short-term correction. Market participants are now striving to balance the continuation of the rally with the risks posed by excessive optimism.
Key Threshold in Bitcoin Fear and Greed Index
The Bitcoin Fear and Greed Index gauges investor sentiment by amalgamating indicators like price volatility, market volume, polls, and social media interactions. Rising to a 61 level, the index enters the greed zone for the first time since early October, suggesting that investors are once again willing to take risks after three months of staying in fear and extreme fear zones.
Bitcoin’s strong price rebound played a pivotal role in this shift. The leading cryptocurrency briefly approached $98,000, testing a two-month high. Rising geopolitical tensions globally have driven investors toward alternative assets, while softer messages from the U.S. administration have caused limited price volatility. Bitcoin settled around $96,000, marking a 7% weekly increase.
Despite this move into the greed zone indicating increased market confidence, it also serves as a cautious signal for experienced investors. Historically, such levels have correlated with short-term peaks, pointing to the potential for corrections resulting from excessive optimism.
Market Expectations and Intra-Blockchain Data
Many market observers agree that Bitcoin’s upward trend is not yet complete. Analysts focused on technical levels propose that the $100,000 threshold could be tested in the coming weeks. Even bolder predictions put targets over $105,000, supported by the prevailing price structure.
Intra-blockchain data enhances the bullish narrative, highlighting accumulation by large and medium wallets holding between 10 and 10,000 BTC. Since mid-January, they have amassed over 32,600 Bitcoin. However, investors with very small balances have shown selling activity, indicating a classic cycle where strong hands are accumulating positions.
Evaluations from analytical platforms suggest the current scenario lays the groundwork for a potential bull run. The disparity between the accumulation by major players and selling pressure from retail investors has historically preceded similar upswings. This trend, coupled with improved sentiment indicators, continues to be closely monitored.