According to CoinDesk, the price of bitcoin has risen to over $49,000, causing traders to enter a period of 'extreme greed' as indicated by the Fear & Greed Index. This index, published by data source alternative.me, measures market sentiment for bitcoin and other prominent digital assets. The last time the index reached a score of 79 out of 100 was when bitcoin hit its all-time high of around $69,000 in November 2021.
Alternative.me states that when investors become too greedy, the market is due for a correction. Savvy traders typically prefer buying when the index shows extreme fear and become more cautious when greed is higher. However, this may not always be the case. The index has consistently been above 70, the threshold for 'greed', since October last year. It dropped to as low as 50 following the approval of bitcoin ETFs in January, which initially turned out to be a 'sell-the-news' event. Over the past 12 months, bitcoin's price has more than doubled. A year ago, one coin was worth as little as $21,000, and recently, the price briefly rose above $50,000 before retreating to $49,400 at press time.
