Although the price of Bitcoin has continued to sideways in a range between $55,000 and $60,000 over the past few days, there does not yet seem to be any fear in the crypto markets.
The Crypto Fear & Greed Index is perfectly neutral at 50 out of 100.
Bitcoin Fear and Greed Index is 50. Neutral
Current price: $58,239 pic.twitter.com/0rTfnJcPg5
— Bitcoin Fear and Greed Index (@BitcoinFear) November 22, 2021
Crypto markets, end of enthusiasm but no fear
Many had expected the price of Bitcoin to rise in the second half of November, at least to get close to the highs of the beginning of the month, when it reached almost $69,000.
However, there has been no such rise, and indeed after 11 November there has been a fall which has led the price of BTC to fluctuate first around the $65,000 mark, then around $60,000, and then in recent days below this psychological threshold.
The fear and greed index had reached 84 on 9 November, but has since started to fall, so that on the 19th it entered the fear zone, at 39.
However, the 19th was the day it returned to just above $55,000, and in the following days, the index returned to the neutral zone, as it had in the days before the 19th.
In other words, this index has only fallen into the fear zone once in the last few days, but it has always been in the neutral zone.
Why investors are not afraid
The lack of fear at this juncture seems to suggest that many investors do not expect a further decline, despite the failure to take off. 2021 is the year following Bitcoin’s third halving, and on both past occasions (2013 and 2017) a large speculative bubble on its price inflated in November, which then burst in December.
Many expected something similar this year, but so far there is no sign of a speculative bubble. Typically in such cases, investors move quickly from enthusiasm to fear, but this has not happened these days, because there has been a shift from enthusiasm to an absence of emotional excesses.
In some ways, the current situation could actually be considered better than that of 2013 or 2017, not least because speculative bubbles inevitably tend to burst sooner or later. In fact, in both of these cases, the bubble eventually burst, resulting in a loss of value from the highs of well over 70%, if not 80%.
In the absence of a new speculative bubble, it is possible instead that the trend will continue without the excesses of the past, and this would be a great sign of maturity for the Bitcoin market.
The current situation of no excesses of excitement is in some ways anomalous on such a young and frequently volatile market, especially at a time of high expectations like this. However, it has happened several times in the past that, in similar situations, big shocks have occurred, either upwards or downwards.