Fear And Greed Index Back To Neutral After 9 Months

The Fear and Greed Index was in a range of fear (orange, 26-45) and extreme fear (red, 0-25) for the vast majority of 2022. The previous day when the index was above the 50 level (blue line) was April 5. At that time, the Bitcoin price was at $45,500.

Then a steep decline began in the BTC price and the correlated chart of the Fear and Greed Index. The index fell particularly sharply after the crash of the Terra (LUNA) ecosystem in May-June 2022. Meanwhile, the November FTX collapse took the index to low of 20.

Crypto Fear & Greed Index

Fear and Greed Index vs. Bitcoin price
Today, the index gives a reading of 51. In recent days, it has returned to neutral territory (46-54) for the first time in 9 months. The price of Bitcoin is consolidating around $21,000.

If we look at the long-term chart of Bitcoin color-coded according to the readings from the Fear and Greed Index, we can see the first signals of a potential trend reversal. Firstly, we see a bullish divergence between the period of the collapse of the Terra ecosystem (LUNA) and the FTX exchange. The latter event drove the price of BTC to lower lows. However, the Fear and Greed Index did not record as low levels as it did with the first crash.

Source: beincrypto.com