The cryptocurrency market is out of fear for the first time in a long time. What has contributed to this?
A popular indicator of coin market sentiment called the Bitcoin Fear and Greed Index rose to neutral for the first time in nine months. It reached 52 points out of 100 on 15 January, after rising about 24 per cent in the previous week. Meanwhile, the index had previously fallen to a record low of 9 points in June 2022. Since then the index has fluctuated between 20 and 30 points, i.e. from “extreme fear” to “fear” of market players. We tell you more about what is happening.
The Fear and Greed Index is calculated based on six criteria: volatility, market dynamics, social media publications, surveys, Bitcoin dominance and trends. The index varies within a hundred points, with a peak at the "extreme greed" level last seen in October 2021, when Bitcoin's price was approaching its all-time high.
Ultimately, the essence of the indicator from analysts at Alternative comes down to identifying panic and euphoria in the digital asset market. As historical data shows, this is usually not a bad time to buy and sell coins respectively.
Stocks of Bitcoin investors
How to determine the sentiment of cryptocurrency traders
The index is in neutral territory today, which is rated at 51 out of 100.
Bitcoin Fear and Greed Index
Naturally, the reason for this was the movements of the cryptocurrency market the day before. In particular, Bitcoin is now valued at $21,000, while BTC was still in the $16,000 zone on January 1, 2023. Such changes reduced investors' fears and at the same time gave them hope for the beginning of a new bull run. As a result, more users are likely to want to get in touch with the crypto, which may not get the entry point it had a couple of weeks ago.
Daily chart of Bitcoin exchange rate
As you can see from the chart below, the rapid rise of the index started on January 13, when the market showed its first local bullish move of the year.
Fear and Greed Index Bitcoin dynamics
Meanwhile, Bitcoin reached its second longest streak of profitable days in its history, with the value of the major cryptocurrency rising for 12 consecutive days. Meanwhile, BTC has already gained 28 per cent since the start of this year, rising even above its price level at the time of the bankruptcy of major cryptocurrency exchange FTX last year.
This means that while holders of the first cryptocurrency have continued to hold it since early November, investors' temporary losses have now essentially been erased given the collapse of FTX. This means that in this particular situation, the hike has paid off again, and selling the coin on panic would not have been worth it.
Bitcoin’s record number of consecutive days of growth
The surge caused a strong reaction from technical indicators on Bitcoin’s chart. For example, the Relative Strength Index (RSI) reached its highest value in four years at 90 points, according to Cointelegraph. A cryptocurrency enthusiast under the nickname ColdBloodShillver explained on Twitter what has happened each time in the past that the RSI has ended up at such a high level. Here’s his quote.
Touch 1: BTC continued to rise 18 percent before correcting by 12 percent;
Touch 2: BTC continued to rise 16 percent before correcting by 21 percent;
Touch 3: BTC did not rise in value and corrected by 31 percent.
Note that all of the above assumptions are based on past market behavior and therefore are not necessarily future-proof. Accordingly, you should consider them only as a probability of events.
RSI indicator on Bitcoin chart
In other words, we could expect Bitcoin to fall in value in the near future, the expert believes. However, the most realistic “forecast” from professional trader Peter Brandt is more to my liking. Here it is.
Any idiot can make wild assumptions about the markets, so here’s my prediction. In reality, no one has the slightest idea what any given market will do.
Contrary to volatility and expectations of a local collapse, Texas A&M University is introducing a course on cryptocurrency into its curriculum. The announcement was made on January 13 by associate professor Korok Ray of the Mays Business School at Texas A&M. Ray will be teaching the Bitcoin Protocol course to students in the College of Engineering and Mays when the spring semester begins on January 17.
In addition, the course will also include Bitcoin Programming, in which students will learn how to “build a Bitcoin library from scratch”. According to Ray, getting approval from the relevant curriculum committee was quite difficult – it took “months” of hard work.
The legal and regulatory implications of adopting blockchain as a technology and the crypto market in general are also being taught at other US educational institutions. Adjunct Professor Thomas Hook of Boston University School of Law recently gave an interview in which he talked about the emergence of a course on the specifics of crypto regulation. Here is his quote.
The course should familiarise future lawyers with the potential problems they may face in crypto litigation. The course also explores the approaches and regulations that govern cryptocurrencies and the business of cryptocurrency companies around the world.
Cryptocurrency courses can also be found at Harvard University, Massachusetts Institute of Technology, Oxford University, National University of Singapore, Cornell University and University of California Berkeley.
Cryptocurrency investors
While we don't think the current market rebound guarantees the absence of challenging times anytime soon, it's still noticeably easier to deal with. Cryptocurrency enthusiasts are now clearly aware that a new bull run may well be coming, well the situation in the coin market is still able to change for the better in a matter of days. We want to believe that many seasoned players will still have time to prepare for the change of trend in the market and make the most of it.
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