After 18 days at the bottom of the widely used crypto market sentiment index, the market appears to be showing the first signs of improving sentiment.
Crypto fear and greed Indexwhich measures overall sentiment in the crypto market, issued a “Fear” rating of 28 on Saturday, the first time since November 10 that it has not issued an “Extreme Fear” rating.
The index’s extended run near the bottom for most of November, historically the best month for Bitcoin (BTC) on average, did not go unnoticed by the broader crypto community.
“Extreme fear” readings tend to have marked bottoms, the trader says
On November 15, crypto analyst Matthew Hyland pointed that the index was at the “most extreme level of fear” in the entire cycle. “A path to BTC dominance like this would be the biggest pain right now,” Hyland said at the time. Just a few days later, on November 23, crypto analyst Crypto Seth he said“Extreme fear is an understatement.”
However, crypto trader Nicola Duke he said that every time extreme fear was on the index, it marked a “local bottom” for Bitcoin.
Other indicators since then suggest that sentiment may be recovering. Crypto sentiment platform Santiment he said on Wednesday that Bitcoin was showing “generally bullish sentiment” after Bitcoin climbed back to nearly $92,000, listing its social media sentiment indicator from bullish to bearish.
The crypto market still seems to be in risk-off mode
Santiment said market discussions surrounding Bitcoin on social media have focused on price volatility and institutional activity, including ETFs and Treasury purchases.
Related: BTC Price Pauses at $92,000: Can Bitcoin Avoid Another Drop?
However, crypto market participants still appear to be indecisive and in risk-off mode, according to CoinMarketCap’s Altcoin Season Indexwhich is currently firmly in “Bitcoin Season” with a score of 22 out of 100 — a metric that oscillates between Altcoin and Bitcoin Season readings.
On Friday, Bitwise Europe’s head of research, André Dragosch, said Bitcoin’s price was misaligned due to a misinterpretation of the broader macroeconomic outlook, particularly rising expectations of an impending recession.
“The last time I saw such asymmetric reward versus risk was during COVID,” Dragosch said.
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