In a remarkable turn of events, the Crypto Fear & Greed Index has recently soared to levels not witnessed since the peak of the crypto market rally in November 2021. The index currently stands at 72, out of a possible 100, firmly placing it in the “greed” category. This marks a significant increase of six points from October 24 and a remarkable 16-point jump from its “neutral” rating of 50 on October 18.
This surge in market sentiment coincides with a renewed wave of enthusiasm regarding the potential approval of BlackRock’s spot Bitcoin exchange-traded fund (ETF) by the United States Securities and Exchange Commission. Market observers and crypto enthusiasts are closely watching developments in this space, as the approval of a Bitcoin ETF would signify a major milestone for the cryptocurrency industry.
On October 24, Bitcoin staged its most substantial single-day rally in over a year, achieving an impressive 14% daily gain. During this rally, Bitcoin briefly surpassed the $35,000 mark, sparking excitement and contributing to the rising sentiment across the crypto market.
The Crypto Fear & Greed Index compiles and evaluates data from six key market performance indicators, including factors like volatility, market momentum, social media sentiment, surveys, Bitcoin’s dominance, and overall market trends. These indicators are weighted accordingly to provide a daily assessment of market sentiment.
The last time the index reached a score of 72 was on November 14, 2021, just four days after Bitcoin hit its all-time high of $69,044 on November 10, 2021, as reported by CoinGecko data. However, the crypto market faced a series of challenges, including the fallout from the Terra collapse, which triggered a cascade of price-dampening effects. Notably, this crisis had far-reaching consequences, affecting entities like hedge fund Three Arrows Capital and crypto lender Voyager Digital.
With the recent surge in enthusiasm surrounding spot ETFs and their potential approval, crypto investment firm Galaxy Digital has offered a bold prediction. They suggest that the price of Bitcoin could increase by more than 74% in the first year following a successful ETF approval. This anticipation adds to the mounting excitement in the crypto space, as market participants eagerly await regulatory developments and their potential impact on the digital asset landscape.
The soaring sentiment in the crypto market highlights the evolving dynamics within the cryptocurrency industry, underscoring the importance of regulatory decisions and the growing optimism among investors and enthusiasts alike.