Bitcoin has once again surpassed the $100,000 mark following a series of price surges over the past three days. This latest uptick comes after a 12.5% increase, bouncing off the $90,000 support level on January 13.
The positive momentum in Bitcoin has had a ripple effect on other cryptocurrencies, leading to a noticeable rise in the overall market capitalization of the crypto space. As a result, the Crypto Fear and Greed Index has now shifted towards extreme greed.
Extreme Greed Takes Over Fear And Greed Index
The Crypto Fear And Greed Index measures market sentiment on a scale of 0 to 100, ranging from extreme fear to extreme greed with a neutral zone in between. Extreme fear typically indicates oversold conditions and bearish sentiment, presenting potential buying opportunities.
On the other hand, extreme greed may signal overbought conditions and the possibility of a correction or crash on the horizon, especially with a sudden shift from neutral to extreme greed.
The total crypto market cap has seen steady inflows this week, with an increase from $3.14 trillion to $3.57 trillion. This surge of about $430 billion in the past five days reflects growing optimism as Bitcoin and major altcoins eye new highs.
The recent influx of funds into the market has propelled the index from a neutral position to a greed threshold, signaling a shift in sentiment. The increasing speed at which sentiment is changing brings the index closer to the extreme greed threshold, hinting at a potential overbought market.
What’s Next For Bitcoin Price?
The sustainability of the market’s bullish sentiment depends on Bitcoin’s ability to hold above $100,000, given its significant market dominance. If bulls can defend this level and establish it as strong support, the risk of extreme greed leading to a downward correction may be mitigated.
Maintaining support above $100,000 would reset the Crypto Fear And Greed Index around this level. Conversely, a failure to hold this threshold could confirm the historical pattern of extreme greed preceding market crashes.
At the time of writing, Bitcoin is trading at $101,420, showing a 1.6% increase in the past 24 hours.
