After one of the worst quarters in their history, cryptocurrency prices might make a comeback, or at the very least, stop falling, if the attitude of traders is any indication.
The Bitcoin Fear and Greed Index hit 20 on July 8, which is the highest position it has reached in the last two months as per alternative.me.
Indeed, this is the highest the gauge has reached since May 7, according to the multifactorial crypto market sentiment analysis.
As per a note published by Arcane Research on July 5, the indicator is moving closer to the “fear” level after spending a prolonged amount of time in the “extreme fear” level.
“The sentiment in the crypto market has been depressed for several months, but we’re seeing a slight improvement this week,” the platform stated.
Crypto market takes a plunge
The Fear and Greed Index is a measurement of investor mood that is used in conventional markets. It takes into account a number of elements, including volatility, momentum, and demand.
In particular, it aims to determine whether traders are excessively optimistic (represented by “greed”) or bearish (“fear”), and it also takes into account a number of other criteria, such as trends on social media and Google search terms.
The index may vary anywhere from 0 (which represents “extreme fear”) to 100 (which represents “extreme greed”).
According to Arcane Research, the seven-day volatility in Bitcoin (BTC) reached its lowest level since the beginning of April, although the 30-day volatility has remained high.
Nevertheless, the experts said that they would not be shocked to see a relatively “uneventful July following a heavy quarter in the cryptocurrency market and the beginning of the summer.”
Bitcoin tests resistance at $22,000
As hawkish central banks and a succession of high-profile crypto blowups crushed sentiment during the second quarter, the value of the world’s biggest digital coin plunged by over 60%.
On July 6, Bitcoin rose above the $20,000 threshold for a short period of time before falling down below it. However, since then, the flagship digital asset climbed as high as $22,000 during the early trading hours on July 8.
WazirX added the Bitcoin market sentiment shifted in response:
“Bitcoin crossed the $22,000 level last day for the first time in 3 weeks as the traditional as well as the crypto markets responded positively to the reassurance given by the US Federal Reserve that the concern regarding recession is blown out of proportion.”
As a result, Bitcoin could be on track to hit its highest weekly gain in the last nine months.
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