After nearly a month in largely positive territory, Bitcoin’s Fear & Greed Index, which measures sentiment, returned to neutral yesterday.
Bitcoin Fear and Greed Index is 52 – Neutral
Current price: $59,723 pic.twitter.com/CdC3RLtrfV
— Bitcoin Fear and Greed Index (@BitcoinFear) November 17, 2021
Bitcoin Sentiment away from fear
Up until two days ago, it was above 70, which is in the Greed zone, but with yesterday’s price drop it hasn’t dropped as far as the Fear zone.
The last time it was in the Fear zone was on October 1, when it was at 27 with the price of BTC below $44,000, but ever since the price climbed above $47,000, the index went first into neutral territory and then into positive territory between October 5 and 7 with the price rising to $55,000.
The current price is not much higher than on October 7, and since it was well above $64,000 until a few days ago, the drop to $60,000 has also dampened enthusiasm.
However, despite the 8.5% drop in the last two days, the Fear & Greed index has not returned to the negative zone, yet.
The fact that it has only fallen as far as 52, which means it has landed in the neutral zone, suggests either that this index will fall further today and in the days to come, or that the crypto markets are not particularly frightened by this drop.
On the other hand, this index has been almost constantly above 70 for more than a month, during which time the average Bitcoin price has been around $61,000. Given that the current price is very close to this figure, it is not all that surprising that the Fear & Greed index simply returned to neutral yesterday, without collapsing into negative territory below 50 points.
Crypto market performance
The crypto market in general doesn’t seem to be having such a bad time either, as total capitalization fell to $2.7 trillion yesterday after peaking at over $3 trillion on November 9, but still remaining above the $2.5 trillion mark of October 28.
Investors and speculators seem to have interpreted the declines so far as a simple correction from the peaks of seven days ago, according to Asia-Pacific head of crypto exchange Luno, Vijay Ayyar.
For example, on May 13, after the price of Bitcoin fell from $58,000 to $49,000, the Fear&Greed index plunged from 68 to 31 in a single day, reflecting the panic that had been brewing in the markets the previous day. Yesterday none of this happened, simply because it seems that there was no real panic.
It is worth noting that Bitcoin’s current price is still higher than it was just twenty days ago, which is probably why yesterday’s drop didn’t cause any panic.