Bitcoin’s recent ascent to the $35,000 level has stoked greed sentiment among market participants. The Bitcoin Fear and Greed Index, a popular barometer that gauges market sentiment, currently stands at 72.

Bitcoin’s mood swings

Just a day prior, the index was slightly lower at 66, still within the “Greed” category but indicating slightly less enthusiasm.

Going back a week, the index was at a “Neutral” position of 50, suggesting that the market sentiment was balanced, with neither excessive optimism nor pessimism dominating. Interestingly, a month ago, the index was almost in a similar neutral state but a tad lower at 47.

The Bitcoin Fear and Greed Index has historically served as a reliable touchstone to discern the market’s overarching sentiment. Its metrics derive from various sources, including volatility, volume, social media, surveys and other market-driven factors.

Historically, during euphoric market phases, the index skews toward “Greed,” cautioning investors about potential overheating. Conversely, during market downturns, the index tends to register “Fear,” often viewed as a potential buying opportunity by contrarian investors.

Full-on bullish mode

Bitcoin reached a 17-month peak and recovered from previous losses amid growing anticipation of U.S. regulatory approval for stock market funds focused on the cryptocurrency.

The cryptocurrency’s value surged by over 10% to $35,000 due to increased trader confidence in the Securities and Exchange Commission (SEC) greenlighting an exchange-traded fund (ETF) in the upcoming months, following positive signals from major institutions like BlackRock.

After a brief consolidation period, Bitcoin successfully reclaimed its standing above $34,000.

Historical data shows that there might still be room for greed to grow in the current cycle. Historically, in February 2021, the index reached a notably high value of 93. In October 2021, it peaked at 84. These past peaks show that the market previously sustained more bullish sentiment than the current levels, and there is potential for the sentiment to elevate further.

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