With bitcoin trading higher amid rising anticipation of a spot bitcoin exchange-traded fund (ETF) approval in the U.S., investor moods have clearly shifted. The index measuring the balance between fear and greed emotions of participants in the crypto market entered the green zone of the scale this week.
Crypto Fear and Greed Index Registers Bullish Market Sentiments
The price of bitcoin (BTC) surged this week, likely in reaction to developments interpreted positively by investors anticipating the regulatory approval of America’s first spot bitcoin ETF. BTC is trading well over $34,000 at the time of writing, compared to around $28,000 last Thursday.
The change in sentiment was quickly registered by the Crypto Fear and Greed Index (CFGI) which exceeded 70 points out of 100 this week and stands at 71 (greed) on Oct. 26, according to the one devised by the software development platform Alternative.me.
Last week, the indicator was in the neutral zone and last month it was below 50 (fear). On this scale, zero means “extreme fear,” when many worried investors are irrationally selling, while 100 represents “extreme greed” with many people buying during a rising market.
Coinmarketcap’s Fear and Greed Index is currently slightly higher, at 72 points. According to the crypto data aggregation site, the indicator remained neutral for most of October before entering the green zone this week when market sentiments changed significantly.
The index had been predominantly expressing investors’ fear between around mid-August and late September and the last time it registered greed before that was in mid-July, the chart provided by Coinmarketcap.com shows.
Market moods in 2023 have been influenced to a great extent by negative news related to the ongoing regulatory crackdown on the industry since last year’s collapses of major platforms in the space such as cryptocurrency exchange FTX.
The prospects of the U.S. Securities and Exchange Commission (SEC) approving a spot bitcoin ETF in the coming months have played a balancing role. According to a recent research by Galaxy Digital, a spot-based bitcoin ETF would boost the price of BTC by 74% in the first year after launch.
Do you expect the Crypto Fear and Greed Index to continue to increase in the coming weeks? Tell us in the comments section below.