Bitcoin abandons fear zone for first time in 9 months

Bitcoin’s famous Fear and Greed Index moved into the neutral territory over the weekend following several months of persistent fear. On Tuesday, Bitcoin was trading up 2.2% on the day at $21,165m, before sliding to $21138.00, up by (+1.21%) at the time of writing versus the previous closing price of $20885.00.

Starting January 15, the index reached a neutral level of 52, its highest since April 5, 2022. The move follows a 24% gain for Bitcoin over the previous seven trading days.

The market sentiment tracker hit a multi-year low of nine in June 2022. Since then, it has been hovering between 20 and 30 within the extreme fear range. It also recorded its longest-ever streak of extreme fear in mid-2022.

The fear and greed index uses sentiments from different sources, including current volatility, market momentum and volume, social media and Google trends data. The data from these sources is used to create a specific number to summarize the emotional landscape regarding BTC and crypto markets.

It comprises five categories ranging from extreme fear to extreme greed, the latter not seen since October 2021.

At the time of writing, the index has dipped back down to 45, which puts it back into the fear zone, suggesting that confidence has yet to make a full return.

Bitcoin has seen its second-longest streak of gains in history, with a 12-day run this month. The asset has gained 28% since the beginning of this year, wiping out all losses in the crash that followed the FTX collapse in early November 2022.

The massive momentum has created a large movement in technical indicators such as the RSI (relative strength index), which has hit its highest level for four years on the daily timeframes.

Several analysts have labeled the recent move as a bull trap but a solid weekly close has led some to believe the momentum will continue.