Crypto traders and investors can use sentiment indexes to gauge the market and inform their decisions on whether conditions favor buying or selling.
The Crypto Fear & Greed Index, a metric tracking crypto investor sentiment, has registered a “greed” score for the first time since the $19 billion October liquidation event that sent traders running from altcoins.
In an update on Thursday, the index a rating of 61, reflecting better overall sentiment after weeks of “fear” and “extreme fear.” The index climbed to 48 just a day before, putting it within the “neutral” zone.
Crypto on Oct. 11 following the liquidation of $19 billion from crypto markets. In the aftermath, the index returned some of its lowest ratings ever, hitting low double digits and December.
Crypto traders occasionally use sentiment indexes to gauge the market and inform their decisions on whether conditions favor buying, selling, or staying on the sidelines.
Bitcoin rips back to two-month high
Overall sentiment has begun to improve in step with a Bitcoin () rally. In the last seven days, from $89,799 to hit a two-month high of $97,704 on Wednesday, to crypto data aggregate CoinGecko.
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The last time the token was over $97,000 was on Nov. 14, though the fear and greed index was in “extreme fear” at the time as Bitcoin was crashing from all-time highs.
The Crypto Fear & Greed Index calculates ratings based on multiple market indicators, including price fluctuations of major cryptocurrencies, trading activity, momentum, Google search trends and general trader sentiment on social media platforms.
Bitcoin holders ducking out, but it’s a “good sign”
Analysts from market intelligence platform Santiment in an X post on Wednesday that over the last three days, Bitcoin holders have been selling their stashes, with a net drop of 47,244 holders, indicating “retail had been dropping out due to FUD & impatience.”
“When non-empty wallets drop, it’s a sign that the crowd is dropping out, a good sign. Similarly, less supply on exchanges decreases the risk of a selloff,” they said, adding that “This price bounce has also been supported by a seven-month low 1.18 million Bitcoin on exchanges.”
Generally, when there is a , it’s considered a bullish sign because traders are holding their stash in a wallet and are less likely to sell quickly.
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