The much-cited Bitcoin Fear and Greed Index moved into neutral territory over the weekend after months of fear.
On 15 January, the index reached a neutral level of 52, the highest since 5 April 2022. The move follows a 24% rise in the price of Bitcoin (BTC) over the past seven days.
The market sentiment indicator hit a multi-year low of nine points in June 2022. Since then, it has hovered between 20 and 30 in the ‘extreme fear’ category. Moreover, in mid-2022, according to Cointelegraph, the longest streak of extreme fear in history was recorded.
The Fear and Greed Index uses “movements and sentiments from various sources”, including current volatility, market dynamics and volume, social media data and Google trends.
The data from these sources is then used to generate a certain number to summarize the emotional landscape regarding BTC and the crypto markets.
It includes five categories ranging from extreme fear to extreme greed, with the latter not seen since October 2021.
At the time of writing, the index has dropped back to 45, which puts it back into the fear category, suggesting that confidence has not yet fully recovered.