Crypto Investors Are Getting Greedy Again

Crypto Investors Are Getting Greedy Again
Jonathan Hobbs, CFA

over 1 year ago1 min

Mentioned in story

The crypto market rebounded over 30% in value over the past month, climbing from a low of $763 billion on June 18th to its current worth of just over $1 trillion. So as you might expect, investors are starting to get greedy again.

That much is clear from the Crypto Fear and Greed Index chart above, which gives a market sentiment score based on how fearful (closer to zero) or greedy (closer to 100) investors are at a point in time. The index monitors a few factors to get its reading: namely price volatility, momentum, social media sentiment, Google Trends data, and bitcoin’s dominance over the market.

The index is currently showing a trend similar to three previous occasions: the bear market bottom of 2018, the Covid lows of 2020, and the leverage flush-out of May to July 2021. In all of those cases, the index hovered around the extremely fearful zone (below 15) for over a month before popping back into the less fearful zone (above 30). And that’s not all they have in common: they were all major market bottoms that were later followed by mega rallies, so today’s reading of 33 could be a sign of better times to come.

It’s a tale as old as time: investors are usually extremely fearful when markets are down, then those with the strongest conviction buy in first at the sign of a turnaround, and then the rest trickle back in as prices recover. So while we might not be out of the woods just yet, it's still reassuring to see crypto investors putting on their brave faces once again.



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