😈 Bitcoin Enters Extreme Greed Zone — Smart Money Turning Bearish?

Bitcoin market sentiment has reached severe greed after hitting $111,000, according to data.

Bitcoin Fear & Greed Index Rises

Alternative's “Fear & Greed Index” measures average Bitcoin and cryptocurrency trading mood. The metric measures sentiment on a 0-100 scale. All numbers over 53 suggest investor greed, while those below 47 show fear. Net neutrality is shown by the index between these cutoffs.

Other than these three zones, there are two ‘extreme’ regions: excessive greed (above 75) and severe fear (below 25). The newest Fear & Greed Index shows market mood in the former.

As large peaks and bottoms have formed, extreme feelings have been important for Bitcoin and other digital assets. An extremely bullish environment makes tops probable, whereas an unduly depressed atmosphere bottoms.

Some traders schedule their buys and sells using this information. This trading strategy is called contrarian investing. Warren Buffet famously said, “be fearful when others are greedy, and greedy when others are fearful.”

However, the Fear & Greed Index is now 78. In contrast, December peaked at 87 and January at 84. The measure peaked at 94 in November earlier in the rally.

Assuming investor demand doesn't drop, the market may not be sentimentally hot yet. However, how severe greed might affect Bitcoin and other cryptocurrencies is unknown.

The figure shows the “Exchange Netflow,” which shows the net amount of Bitcoin entering or leaving Binance's wallets.

The Binance Exchange Netflow has a big negative number, indicating that investors have removed a lot of coins. Net outflows for the platform were 2,190 BTC, or $237 million.

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