Recent data indicates that the Bitcoin Fear & Greed Index has experienced a significant increase, reflecting a recovery in the asset’s price, which has now climbed above $81,000.
Current Sentiment: Fear Prevails
The Fear & Greed Index is a valuable tool developed by Alternative to gauge the prevailing sentiment among investors in the Bitcoin and broader cryptocurrency markets.
This index operates on a scale ranging from zero to one hundred, where values exceeding 53 indicate a sentiment of greed, and those below 47 correspond with fear. Any readings that fall between these thresholds reflect a neutral stance among investors.
Currently, the Bitcoin Fear & Greed Index stands at a value of 39, signifying a general sentiment of fear prevailing among traders. However, it is important to note that this fearful mindset is relatively mild, as it is only 8 points away from the neutral zone.
In comparison, just a day prior, the index recorded a level of 18, which categorized the sentiment as extreme fear (a score of 25 or lower). This sharp downturn coincided with the significant drop in Bitcoin’s price amidst concerns regarding upcoming tariffs.
However, following President Donald Trump’s decision to implement a 90-day pause on most tariffs, the market has responded positively, leading to a noticeable recovery in sentiment.
A visual examination of the Fear & Greed Index reveals a pattern of volatility, whereby the index has been fluctuating significantly, suggesting that investor sentiment remains fickle. Historically, Bitcoin and altcoin markets have often behaved contrary to popular expectation, where extreme fear has frequently marked market bottoms. Given the recent extreme fear reading, there is potential that we have already witnessed a market bottom, paving the way for a more sustained recovery.
It is worth mentioning that earlier in February, the index fell to an even lower value of 10. While this too coincided with a market low, it did not represent the ultimate bottom for Bitcoin. Consequently, it remains to be seen whether the current sentiment holds.
The Fear & Greed Index aggregates various factors, including social media sentiment. According to a post from analytics firm Santiment, there has been a noticeable shift in market sentiment on social media platforms following news of the tariff pause. Currently, the ratio of positive to negative posts regarding Bitcoin and Ethereum stands at 3.5 to 2.3, respectively.
Current Bitcoin Price
As of now, Bitcoin is trading at approximately $81,500, marking a nearly 6% increase over the last 24 hours.
