The crypto market is rife with greed again following bitcoin’s (BTC) latest rally to a three-week high of over $66,000.
Data from Alternative.me shows the Crypto Fear and Greed Index is currently as high as 74, indicating a period of greed among digital asset investors.
Crypto Investors Are Greedy
The surge in crypto market sentiment to greed follows a period of neutrality among market participants. CryptoPotato reported earlier this month that the fear and greed index stood at 54 for the first time since January, representing neutral sentiment among investors, while BTC traded around in a range between $57,000 and $60,000.
At the time, BTC and the broader crypto market experienced heightened volatility and a massive wipeout in total market capitalization. On one occasion, BTC fell below its crucial support levels, crashing 11% within 36 hours.
The plunge drained the crypto market of more than $200 billion, leaving a trail of ruins among altcoins and meme coins. Notably, digital asset investment funds were affected, with some networks seeing consecutive weeks of outflows.
However, the tide has changed this week, with the bulls taking over the reins on Monday. After hovering around $61,000 during the weekend, BTC surged to $63,000 on Monday and then persisted to $64,000 on Wednesday. At the time of writing, the leading cryptocurrency was changing hands at $66,200, up 5% in the past seven days.
Bitcoin’s upward trajectory has extended to the spot exchange-traded fund (ETF) market, with inflows surging to a multi-week high. On Wednesday, flows into the ETFs hit $303 million, a figure last seen on May 3. Yesterday, the funds also saw inflows totaling $257 million. The two consecutive days of substantial inflows contrast the flows seen in the last two weeks, which are mostly less than $100 million.
What Happens Next?
For the uninitiated, the Fear and Greed Index determines investor sentiment by analyzing several factors, including market momentum, volatility, bitcoin’s dominance, trends, and social media. On a scale of 0 to 100, 0 indicates extreme fear, 50 signals neutrality, and 100 means extreme greed.
With the index at a point of greed, a further market rally could push it to the extreme greed zone. Unfortunately, this would give room for a correction, which is typical in crypto markets.
Regardless, the surge in liquidity entering the market could push BTC out of its current price range to a higher level.
