The Crypto Fear and Greed Index continues to give a reading of ‘Extreme Greed,’ despite a Bitcoin price pullback. The leading cryptocurrency fell briefly below $33,700 on Jan. 20.
The Fear and Greed Index has suggested ‘Extreme Greed’ in the Bitcoin market now since early November. However, confidence does now appear to be waning.
Bitcoin Market Remains in State of ‘Extreme Greed’
Even significant Bitcoin price pullbacks have not dampened the enthusiasm. At 78/100, the indicator’s reading for Jan. 20 was still above the ‘Extreme Greed’ threshold.
At the time the reading was taken, BTC had already fallen more than $1,000 from its previous day’s high of $37,600. This slide continued, as the cryptocurrency dropped to local lows of $33,700 on Jan. 20.
Similarly, on Jan. 11, just days after BTC’s all-time high of almost $42,000, Bitcoin tanked to less than $32,000. Despite this ~25% pullback, the index still gave an ‘Extreme Greed’ reading of 84/100 on Jan. 12.
It’s hardly surprising that the market remains optimistic even in the face of such pullbacks. Bitcoin surpassing its all-time high price earlier this month came after numerous bullish developments.
Corporate investments, like those of MicroStrategy, and rising institutional interest, like Bitcoin buys from MassMutual, highlighted the asset’s growing appeal among a different class of investor. Similarly, former Bitcoin naysayer JPMorgan turned bullish on the digital asset, predicting its price could top $146,000.
How Long Will the Market Stay Greedy?
Despite the Crypto Fear and Greed Index continuing to read ‘Extreme Greed’ for a record two-and-a-half months, its readings over the last week have been starting to drop.
For the entire month of December and the beginning of January, almost all readings were above 90/100. However, since the 25% correction earlier this month, scores have not exceeded 90.
This indicates that the market’s exuberance is waning. The Jan. 20 reading of 78 is the same as that of Jan. 13, representing the lowest readings since Nov. 5.
Yet, some major Bitcoin buyers are using the lower prices to scoop up more. As BeInCrypto reported on Jan. 19, Grayscale bought an extra 16,244 BTC in a single day.
This followed purchases on Jan. 13 and 14 of more than 4,700 BTC. Numerous other 24-hour periods have seen Grayscale buy more than the 900 BTC mined in a single day.
The company also reported swelling institutional interest during the closing months of 2020. Its recent Bitcoin buying suggests it’s expecting the trend to continue.