The crypto market fear and greed index has sharply declined to the neutral zone due to the sharp Bitcoin correction after the approval of spot Bitcoin exchange-traded funds (ETFs)
The fear and greed index considers parameters such as volatility, market momentum (volume), social media sentiment, dominance, and trends.
Fear and Greed Returns to Neutral as Bitcoin Struggles
The screenshot below shows that the fear and greed index has dropped to 52, the lowest since October 2023. Generally, when the fear and greed index is above 75, in the extreme greed zone, there is a high likelihood of a market pullback.
Last week, while the index was on the cusp of the extreme greed zone, the price of Bitcoin sharply corrected by around 15% from nearly $49,000 to $41,500.
Read more: What Is the Crypto Fear and Greed Index?
Seemingly, there was euphoria in the market due to the anticipation of an approval of spot Bitcoin ETFs from the US Securities and Exchange Commission. But since the approval last week, market participants have treated it as a “sell the news” event.
Due to the market correction, even the funding rates of blue-chip crypto assets such as Bitcoin, Ethereum, and Solana have almost fallen to neutral levels.
Community Weighs In
Indeed, the greedy sentiments have declined in the crypto markets. Industry experts and the community are now anticipating a pullback to lower levels. An X (Twitter) user – @CryptoFaibik, believes that Bitcoin will remain range-bound for the next few months.
“$BTC Not a great Weekly close.
Now, I anticipate that #Bitcoin will likely remain in the Range of 38-45k in the next couple of Months.
Bulls have a lot of work ahead this year, so they might need a bit of rest.
Bitcoin halving rally is expected to begin in mid-March.
Expecting New All time high in Q3 2024,” said @CryptoFaibik.”
Read more: Bitcoin Halving Cycles and Investment Strategies: What To Know
Whereas others believe that as the euphoria has perished now, it is time for accumulation in the market. Another X user, @Micro2Macr0, believes that while the crypto fear and greed index remains close to neutral, the downside risks are comparatively less.
“Upside returns are currently better than downside risks. If #Bitcoin drops towards $38,000, it’s a STRONG BUY ZONE, IMO,” said @Micro2Macr0.
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Source: https://beincrypto.com/crypto-market-sentiment-neutral/