The recent development underscores an uptick in bullish sentiments as Bitcoin’s price rises to Pre-FTX levels.
The Bitcoin Fear and Greed Index (FGI) recently hit “Neutral” levels for the first time since April 2022, and with this metric came a wave of optimism among crypto enthusiasts. The development indicates an increase in bullish sentiments amid the asset’s latest rally which led to a 2-month high of $21,340 today.
The achievement was highlighted today by The London Crypto, a pseudonymous crypto trader, and ByBit partner, who highlighted its significance, sharing a snapshot of the FGI which reveals a 52 (Neutral) value as updated on January 15.
— The London Crypto (@SerLondonCrypto) January 16, 2023
After dipping below 53 on April 5, the BTC FGI remained in the “Fear” and “Extreme Fear” regions since then, as investors’ sentiments were further impacted by the Terra collapse of May and the FTX implosion of November.
The Fear and Greed index is an important indicator of market sentiment, and its recent move to Neutral territory is a sign that the market is seeing an uptick. Investors believe this could be a sign of a more sustainable rally, as confidence in the asset’s long-term prospects picks up. Notably, most investors expect BTC to return to $25k between January and March.
In addition, CryptoQuant data also suggests an increase in bullish sentiments, as its exchange indicators slide to favorable zones. The BTC Exchange Reserve reveals a gradual decrease in Bitcoin’s reserve on exchanges, indicating a lower selling pressure on investors. The data from this metric is also corroborated by the BTC Exchange Netflow which indicates a lower Netflow.
BTC Price Outlook
Meanwhile, BTC holds steady above $20k, currently changing hands at $20,950 as of press time, up 20% in the past week. The asset reclaimed $21,340 today before facing stiff resistance from the bears. 8 hours after BTC was battered below $21k, the asset retested the level for the second time today before hitting another roadblock.
The crypto space is currently filled with mixed opinions on the next direction of the asset. While some analysts believe this is possibly a bull trap, anticipating new lows, others believe it could be the start of a bull run. Notable analyst Crypto Rover recently asserted that BTC might have already seen its lowest point of this year ($16,552).
Over the weekend, Il Capo of Crypto reiterated that the market could still see new lows despite the recent rally, stating reasons why he believes so. He further asserted that a dip to $12k is still “likely.”