After one of the worst quarters in history, cryptocurrency prices could make a strong comeback or, at the very least, stop falling, if the attitude of traders is to be believed.
The “Fear & Greed” index reached 20 on July 8, the highest position it has reached in the past two months, according to alternative.me.
Bitcoin Fear and Greed Index is 20 ~ Extreme Fear
Current price: $21,383 pic.twitter.com/Ny0BoMV7NJ
— Bitcoin Fear and Greed Index (@BitcoinFear) July 8, 2022
Indeed, this is the highest level the gauge has reached since May 7, according to the Multifactor Crypto Market Sentiment Analysis.
According to a note published by Arcane Research on July 5, the indicator is approaching the level “fear“after spending an extended time in the level”extreme fear“.
“Sentiment in the crypto market has been depressed for several months, but we are seeing a slight improvement this week,” the platform said.
The cryptocurrency market takes a dive
The Fear and Greed Index is a measure of investor sentiment that is used in mainstream markets. It takes into account a number of elements, including volatility, momentum and demand.
In particular, it aims to determine whether traders are overly bullish (represented by “Greed”) or bearish (“Fear”), and it also takes into account a number of other criteria, such as social media trends and Google search terms.
The index can vary between 0 (which represents the “extreme fear“) and 100 (which represents the “extreme greed“).
According to Arcane Research, Bitcoin’s seven-day volatility hit its lowest level since the start of April, although 30-day volatility remained high.
Nevertheless, experts said they would not be shocked to see a relatively “uneventful after a heavy quarter in the cryptocurrency market and the start of summer.”
Bitcoin is testing resistance at $22,000
As anti-crypto central banks and a succession of high-profile market crises crushed sentiment during the second quarter, Bitcoin’s value plunged more than 60%.
On July 6, bitcoin broke above the $20,000 threshold for a short time before falling back below it. However, since then, the flagship digital asset has surged as high as $22,000 on July 8.
WazirX added that bitcoin market sentiment changed in response:
“Bitcoin crossed the $22,000 level last day for the first time in 3 weeks as traditional as well as crypto markets responded positively to assurances from the US Federal Reserve that recession concerns are exaggerated.”
As a result, bitcoin may be on course for its highest weekly gain in the past nine months.
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