Despite forceful resistance at the $73,000 price level, which led to a noticeable drop in prices on Thursday after a remarkable week of gains, traders and traders continue to bet on Bitcoin, showing a continued uptrend demand for crypto assets.
Bitcoin back in extreme greed territory after several months
Investor sentiment around Bitcoin has skyrocketed as the BTC Fear and Greed Index has reached extreme levels of greed, signaling an sanguine outlook for the crypto asset. Jason Pizzino, macro trader and investor, reported developments in a recent post on X, which may suggest an overvaluation of the asset.
The macro expert pointed out that for 2 days in a row Bitcoin she found herself in the zone of extreme greed, which marked the first time she had been in the zone since June of this year. He further warned that this market sentiment may continue for the next few months as seen from past market trends.
Specifically, the Fear and Greed Index is a tool to examine BTC’s superiority over other digital assets by assessing variables such as volatility, dynamics, and social media trends. This is a reliable indicator that gives investors insight into when and where to sell buy BTC.
According to Pizzino, near its peak in February and April, Bitcoin last experienced long periods of extreme greed, suggesting renewed confidence and optimism towards BTC. While there was still a lot of pricing activity during this period, Pizzino says the development is the “most important signal.”
This enhance in market sentiment reflects continued growth in confidence among the retail and trade sectors institutional investorstriggering an upward trend in Bitcoin’s price. While this change in enthusiasm often means investors are anticipating greater gains, there is a risk of overbought conditions occurring.
Meanwhile, the expert urged investors to be wary of those promoting immense historical inflows Bitcoin Exchange Spot Funds (ETFs) currently or current comments by Michael Saylor on BTC, claiming that everything was the same 8 to 10 months ago.
BTC in bear territory amid extreme greed
Despite the great optimism around BTCcrypto assets fell to the $69,000 threshold, showing signs of a long-term decline. Given that this decline comes after a week of gains, it has sparked speculation about its short-term potential.
However, with trading volume increasing by over 21% in the last 24 hours, there is the possibility of a short-term price rebound as the bulls appear to gradually regain control of the market.
The decline also led to a decline Bitcoin domination market share, which dropped to 58%, previously ranking close to 60%. This slight decline in market dominance during BTC price declines increases the potential for diversification into altcoins.
Featured image from Unsplash, chart from Tradingview.com
