Ripple’s XRP and Ethereum suffered losses overnight. The reason: After two brutal months, the crypto market recently reached a level of greed that has not been seen since April.
The crypto fear and greed index – a collective metric that estimates the current sentiment in the crypto market – remains in the “greed” zone, while most of the major cryptocurrencies started the new week with prices rising.
The index reflects the daily emotions and sentiments for Bitcoin (BTC) and other major cryptocurrencies. These are collected and analyzed from various sources. These include current market volatility, volume, momentum and behavior on social media.
Greedy for Bitcoin
The metric, which scales from 0 (maximum “fear”) to 100 (ultimate “greed”), typically passes through the “neutral” area and changes to the “greed” zone in times of strong price rallies if the demand for cryptocurrencies so Offer exceeds.
After the Bitcoin price drop in mid-May, the crypto fear and greed index showed “fear” in the market for more than two months.
Market sentiment began to change in late July, and eventually the Bitcoin index returned to “extreme greed” levels on August 14th.
For the First Time in 3 Months: Bitcoin Fear and Greed Index Shows Extreme Greed 🤩 pic.twitter.com/bcOhzoZiWs
– Traders Profit Club (@tprofitclub) August 15, 2021
Greedy for Ethereum
Similar to Bitcoin, the fear and greed index for Ethereum (ETH) has recently stayed in the “greed” zone.
Sentiment surrounding the world’s second largest cryptocurrency (measured by market capitalization) also escalated into a state of “extreme greed” after a major upgrade to the Ethereum network was introduced on August 5th: EIP-1559.
The upgrade included a reducing measure intended to curb the growth in supply of the cryptocurrency. That drove up the price of Ethereum and put the index pointer into “extreme greed” on August 8, when it rose to 79 points.
Ethereum Fear and Greed Index is 79 – Exteme Greed pic.twitter.com/QFWTSkE0Qt
– Ethereum Fear and Greed Index (@EthereumFear) August 8, 2021
Based on the metric’s two simple assumptions, “extreme fear” signals investor concern and the possibility to buy, while “extreme greed” signals the market’s readiness to correct.
With both cryptocurrencies recently showing signs of extreme sentiment, there is still plenty of room for resurrected greed to work its magic and drive prices higher.
Did Andrzej Sapkowski, a Polish economist and fantasy writer (“The Witcher”) have “the moon” in mind when he said: “Human greed has no limits”?
Proof of text: Cryptoslate
Last updated on August 17, 2021
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