Bitcoin Fear & Greed Surges As Price Touches $74,000, But Extreme Fear Persists

Data shows the Bitcoin Fear & Greed Index has marked an improvement after the latest price surge, but its value is still inside the extreme fear zone.

Bitcoin ended last week on a mixed note, first observing a sharp surge near $74,000 on Friday, but then dropping back into the low $70,000 levels inside the same day. The weekend saw the asset consolidate, but it seems the new week has brought with it fresh bullish momentum as BTC has jumped once more.

As the below chart shows, Bitcoin went further than the Friday jump this time, briefly hitting $74,400.

The cryptocurrency has pulled back a bit since the high, but with a current value of $73,200, it remains more than 7% in the green on the weekly timeframe. BTC hasn’t been alone in the bullish push as the altcoins have also observed rallies. Ethereum, the second largest digital asset, has seen even better returns than Bitcoin, being up 13% on the week.

Recent trader sentiment has been poor because of the extended bearish price action, but the new recovery has led to some improvement.

The “Fear & Greed Index” refers to an indicator created by Alternative that tells us about the average sentiment present among investors in the Bitcoin and wider cryptocurrency markets. The index determines the trader mentality using the data of five factors: market cap dominance, trading volume, volatility, social media sentiment, and Google Trends. To represent the sentiment, it uses a numerical scale running from 0 to 100.

All values above 53 on this scale correspond to a sentiment of greed, while those under 47 to one of fear. The values in between imply a net neutral market mentality. Besides these three core zones, there are also two extreme territories on the index called the extreme fear (25 and under) and extreme greed (above 75).

All the recent bearish price action pushed the market down into one of these extreme zones, as the chart below shows:

From the graph, it’s visible that since dropping down deep into the extreme fear zone in February, the Fear & Greed Index has steadily been improving this month. The latest Bitcoin recovery surge, in particular, has induced a notable jump in the indicator.

However, the trader sentiment still hasn’t improved enough to escape the extreme fear zone. Nonetheless, at a current value of 23, the index is now very close to transitioning into the normal fear region.