Bitcoin Market Sentiment Enters Extreme Greed Zone, What Does This Mean For BTC?

Despite facing strong resistance on the $73,000 price level, resulting in a notable price drop on Thursday after a remarkable week of upside movement, traders and investors are still betting on Bitcoin, demonstrating a persistent demand for the crypto asset.

Bitcoin In Extreme Greed Territory Again After Fews Months

Investors’ sentiment around Bitcoin has witnessed a pointy increase as BTC’s Fear and Greed index has moved into extreme greed levels, signaling an optimistic outlook for the crypto asset. Jason Pizzino, a macro trader and investor, reported the event in a recent post on X, which can suggest an overvaluation of the asset.

The macro expert identified that for two days in a row, Bitcoin was throughout the extreme greed zone, marking its first time since June this 12 months. He further warned that this market sentiment may persist throughout the following few months as seen prior to now market trends.

Specifically, the Fear and Greed index is a tool for examining BTC’s superiority over other digital assets by assessing variables like volatility, momentum, and social media trends. It has been a reliable indicator that provides investors insights on when to sell and buy BTC.

BTC in extreme greed in 2 consecutive days | Source: Jason Pizzino on X

In keeping with Pizzino, near the height in February and April were the last time Bitcoin experienced prolonged periods of maximum greed, suggesting renewed confidence and optimism in BTC. Though there was still numerous price activity during this era, Pizzino claims development is a “top signal.”

This increase in market sentiment reflects a continuing rise in confidence amongst retail and institutional investors, triggering an upward direction for the worth of Bitcoin. While this shift in enthusiasm often implies that investors are anticipating more gains, there may be a risk of overbought conditions.

Within the meantime, the expert has urged investors to be wary of those promoting the big inflows of the historical Spot Bitcoin Exchange-Traded Funds (ETFs) presently or Michael Saylor’s current comments about BTC, claiming every part was the identical 8 to 10 months ago.

BTC In A Bearish Territory Amidst Extreme Greed

Despite the strong optimism around BTC, the crypto asset has fallen to the $69,000 threshold, showing signs of an prolonged decline. Provided that this drop comes after per week of upward movement, it has sparked speculations about its short-term potential.

Nevertheless, with the surge in trading volume prior to now 24 hours by over 21%, there may be the potential of a transient price rebound because the bulls appear to be steadily regaining control of the market.

The decline has also led to a dip in Bitcoin’s dominance out there, which has fallen to 58%, previously situated near 60%. This slight decrease in market dominance during waning performances in BTC raises the potential of diversification towards altcoins.