Market sentiment shows that crypto investors have renewed their bullishness and confidence in BTC as the world’s largest cryptocurrency continues to flirt with the $31,000 mark.
According to the Fear and Greed Index – a popular tool used to measure overall sentiment – greed has taken over the market as investors are getting too comfortable with bitcoin at its current price.
Greed Takes Over
The Fear and Greed Index evaluates market sentiment by analyzing key factors, including volatility, market momentum, social media trends, and bitcoin’s dominance. It uses a scale of 0 to 100, where 0 represents “Extreme Fear” and 100 means “Extreme Greed.”
Over the past week, the greed index has consistently climbed above 50, reaching a high of 64, coinciding with Bitcoin’s price surpassing $30,000.
The increased greed in the market is fueled by several factors, including institutional BTC accumulation, two consecutive green quarters, and positive on-chain metrics.
Institutional Bitcoin Accumulation Surges
One of the key drivers behind the resurgence of greed in the crypto market is the exponential increase in institutional Bitcoin accumulation.
Over the past few months, prominent institutional players, including major financial institutions and corporations, have been actively acquiring bitcoin as part of their investment strategies, according to blockchain analytics firm CryptoQuant.
This wave of institutional adoption validates bitcoin as a store of value while signaling institutional confidence in its long-term potential. The strategic move by institutional investors to accumulate BTC is underpinned by the belief that the crypto asset can act as a hedge against inflation and provide diversification in traditional investment portfolios.
The institutional accumulation has also contributed to the positive sentiment surrounding bitcoin and has drawn the attention of retail investors seeking to capitalize on the growing institutional interest.
2 Consecutive Green Quarters Ignite Optimism
Bitcoin’s recent milestone of posting two consecutive green quarters for the first time since 2021 has further fueled optimism among investors. After a period of market uncertainty and bearish sentiment throughout last year, bitcoin’s back-to-back positive quarterly performances signify a potential shift in market dynamics.
The consecutive green quarters demonstrate BTC’s resilience as it navigates through the bear market and emerges stronger. This accomplishment has instilled confidence in investors, signaling a possible reversal in the market trend. The bullish sentiment resulting from the milestone has ignited renewed greed among market participants.
Investors’ Behavior Points to a Bull Run
Beyond institutional accumulation and two consecutive positive quarterly performances, on-chain metrics and investor behavior provide further evidence of a potential bull run in the crypto market.
According to Bitfinex’s latest weekly report, on-chain data, such as Bitcoin’s Spent Output Profit Ratio (SOPR) and Net Unrealized Profit and Loss (NUPL) indicators, show that almost all bitcoin trades have been profitable since the crypto asset broke above $29,500.
Investor behavior also reflects an increasing appetite for risk and the potential for substantial returns. The report noted that traders are confident about their spot position as they are unwilling to sell at a loss.
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