The Bitcoin Fear and Greed Index is at a 16-month high, rising to 64, as traders appear to be optimistic of the coin’s prospects.
Bitcoin traders are greedy
According to the index’s reading on Mar. 18, it appears that traders are “greedy” and looking to buy more coins and ride the march higher. The shift in sentiment follows the exemplary performance of bitcoin (BTC) in the past few trading days.
The Fear and Greed Index is a crypto sentiment indicator that traders and investors closely follow. Unlike other asset classes, crypto and bitcoin can be influenced by hype.
Depending on market conditions, there can be fear of missing out (FOMO) when the traders expect bitcoin to outperform. Meanwhile, in depressed conditions characterized by tanking asset prices, there is fear, uncertainty, and doubt (FUD). This can trigger a sell-off, forcing prices lower.
When writing on Mar. 18, BTC is changing hands above the $27,000 mark, firm on the last trading day, surging over 35% in less than a week. The rapid expansion of bitcoin follows a series of fundamental events that spooked the traditional finance markets, forcing capital to censorship-resistant and trustless assets, mostly bitcoin, and other crypto assets, including ethereum (ETH).
Banking crisis In the US forced crypto prices higher
Following news of a bank run on Silicon Valley Bank (SVB) and the closure of Signature Bank, crypto sentiment quickly shifted from FUD to FOMO as bitcoin rocketed from as low as $19,700 to over $27,000 when writing.
The fear of a market-wide collapse and the Federal Reserve, the central bank of the United States, providing a safety net for struggling banks is increasing talk that they are back to easing, fueling the crypto and bitcoin bull run.
This preview is expected to drive the reading of the Fear and Greed index even higher. During the last bull cycle in November 2021, when bitcoin peaked at over $69,000, the reading stood at 72. Whether this reading will be surpassed even with the coin trading at over half of 2021 high is yet to be determined.
In the daily charts, bitcoin has already bottomed and is trading above February 2023 and August 2023 highs, rising 74% from November 2022 lows.
This article first appeared at crypto.news