Amid the turbulence, the Bitcoin price has finally fallen below the $29,000 support. This decline points to the bears taking over the market, but investor sentiment has not swung the way it normally would in such circumstances. Instead of swinging toward bearish momentum, investors are rather leaning toward greed, suggesting that they do not expect this decline to last.
Bitcoin Fear & Greed Index Moves Toward Greed
The Bitcoin Fear & Greed Index measures investor sentiment toward the market by taking into account things like surveys, social media posts, market volume, and volatility, among others. The aggregate of these metrics is then used to determine if investors are feeling bearish or bullish.
The scale goes from 1-100 with 1-25 standing for extreme fear, 26-47 means fear, 54-75 means greed, and 76-100 represents extreme greed. The 48-53 level represents neutral sentiment, which is where the index has been for the last week. The direction in which the index points toward neutral is of interest here.
On Monday, the index was sitting at a completely neutral score of 50. However, by Tuesday, the index is now sitting at a neutral score of 53. This move from 50 to 53 indicates that despite the price of BTC falling below $29,000, investors are still viewing it in a positive light. Otherwise, the index would’ve fallen below 50.
Fear & Greed Index sitting at 53 | Source: alternative.me
Given this, the chances that the current decline will not last long are high. This is because investors being bullish about BTC means they’re likely to put more money into it. Once such buying pressure begins to mount, then BTC could recover above $29,000 once more.
Attention Remains On BTC
On Monday, Bitcoinist reported an 82% spike in Bitcoin’s daily trading volume, indicating renewed interest in the digital asset. This saw BTC’s trading volume climb to $10.8 billion, but the cryptocurrency has still not slowed down.
BTC’s daily trading volume also saw another significant jump on Tuesday, rising 22% in the 24-hour period. This brought the digital asset’s daily volume to $13.4 billion at the time of writing. This continuous rise reiterates the rising interest in the asset, showing that the move in the Fear & Greed Index toward the greed territory is not a fluke.
The volumes could point to accumulation among investors. And if this is the case, then BTC will likely recover over $29,000. A recovery above this mark would put the digital asset back on track to retest the $30,000 resistance before the weekend.
BTC price falls below $29,000 support | Source: BTCUSD on Tradingview.com