Multi-year high Greed floods back into crypto market; Why does it matter?

Within the most recent rally and multiple cryptocurrencies surging in price, cryptocurrency greed is back to 2021’s levels in multi-year highs. Investors and traders firmly believe that a bull market has started, setting high expectations for 2024.

Fear and Greed indexes offer valuable insights into the overall sentiment in a given market based on technical indicators.

Essentially, fear surges under bearish indicators and weak momentum with high selling pressure. In the meantime, greed appears during a strong momentum with an increased demand.

Crypto Fear & Greed Index historical chart. Source: Alternative.me

As we can see on the chart, the Index is volatile, and isolated peaks are not directly correlated with a bull market. Nevertheless, when Greed (or Fear) consistently holds a certain zone, correlation shines due to a more credible indicator.

In comparison to what happened in 2020 and 2021, it is possible that crypto ‘Fear’ will dominate again before even higher ‘Greed’ levels.

All things considered, this multi-year high reflects what many cryptocurrency investors are feeling at this point. Furthermore, cryptocurrency’s total market capitalization currently marks $1.60 trillion, according to TradingView’s index. Some traders are also waiting for an Altseason to ignite.

Finally, if the capital inflow is able to maintain constancy and strong momentum, prices could continue surging in the following days. After that, the market might see a retracement in case greed rises too much, too fast.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.