2023-01-31 01:00:19

Bitcoin Spiked to $23,960, But Traders Are Not Very Greedy

Sentiment data reveals that the Bitcoin price upwards trend from November lows to as high as $23,960 on January 30 was marked by “sober” traders. Related Reading: Gala Games Plans for Mobile Gaming, GALA To Be The Primary Token Bitcoin Traders Are Not Greedy Per the Fear and Greed Index, the 40% surge of BTC prices to January highs is unlike other periods in the coin’s boom and bust cycle. When BTC rose to bottom-up from November lows following the FTX contagion, the Fear and Greed Index spiked to a maximum of “55”. Although this is still “Greed,” indicating a possible Fear of Missing out (FOMO) amongst traders, it is suppressed compared to the 2018 to 2019 cycle. By overlaying the sentiment index’s reading with BTC prices over months and years, it is clear that the spike to spot levels was approached with caution and even levels of risk management. Fear gripped the market in late 2018 when prices sank below $4,000. However, once prices began turning around ahead of the Bitcoin halving in 2019, traders doubled in droves, forcing the index reading to “69”, the Greed territory, from “21.” Even after a minor retracement, the index’s reading was persistently above the “60” mark throughout late Q4 2018 and H1 2019, pointing to general confidence by traders and investors. Sentiment and Bitcoin Correlation A big part of BTC’s price action is shaped by how market participants perceive prevailing market conditions. Hype can trigger demand, and prime volatility as billions of dollars pour into Bitcoin. The crypto space is new and still needs a regulatory framework. Crypto regulations are being developed and improved across the board. Complex products, including Exchange-Traded Funds (ETFs), may be approved months ahead. Whether they are given the go-ahead depends on the availability of monitoring tools aimed at preventing price manipulation. The former United States Securities and Exchange Commission (SEC) Chair, Jay Clayton, cited the absence of sufficient monitoring tools as one of the reasons for rejecting the launch of an ETF tracking the spot price of Bitcoin. Traders are confident Bitcoin has turned the corner, shaking off the bears of November. However, considering the state of the general economy and inflation readings, BTC and crypto prices remain in a precarious position. Related Reading: Dogecoin Surges 6% After Elon Musk Unveils Crypto Payment Master Plan Beyond macroeconomic factors, the surge of BTC prices is at the back of decreasing stablecoin deposits to cryptocurrency exchanges. Historical data shows a direct correlation between stablecoin issuance and BTC prices.

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