Bitcoin Surpasses $50K For First Time Since 2021, Index Hits Extreme Greed
Bitcoin crossed the USD $50k (AUD $76.6k) mark early Tuesday morning Australian Time, fell back below USD $49.6k (AUD $75.6k) and has since been fluctuating around this important psychological barrier. At the time of writing, BTC is trading hands for USD $50,029 (AUD $76,627).
When zooming out we can see that we are seeing a similar dynamic as in the 2017 and 2021 bull runs when Bitcoin experienced explosive gains.
Fear & Greed Index to Highs Not Seen Since 2021
Meanwhile, the Fear & Greed Index has just hit Extreme Greed for the first time since 2021. The index measures market sentiment on a scale from 0 (indicating extreme fear) to 100 (indicating extreme greed).
The long march back into Extreme Greed comes after the 2022 crypto market crash when the index dropped to one of its lowest values ever and hit 6, Extreme Fear on June 19, 2022.
The only time the index was lower was August 22, 2019, when the index dropped to 5.
The index is intended solely for Bitcoin as it measures the volatility and drawdowns of BTC, among other factors like market volume and momentum, social media mentions, surveys, and dominance.
Several traders and analysts have pointed to the Bitcoin halving – which is expected in April 2024 – as a reason for the current run-up and increased bullish sentiment. Many do believe we are in the Pre-Halving Rally, which could see another correction before new all-time highs.
It’s Different This Time Says Grayscale
In a recent blog post, Michael Zhao from Grayscale highlighted several factors to argue that the upcoming Bitcoin halving event could be fundamentally different from past halvings.
Zhao wrote that a combination of proactive measures by miners, new use cases driving on-chain activity, and structural changes in the investment landscape are reasons why the upcoming Bitcoin halving is fundamentally different from previous ones.
While it has long been heralded as digital gold, recent developments suggest that Bitcoin is evolving into something even more significant. Propelled by a surge in onchain activity, bolstered by significant market structure momentum, and underscored by its inherent scarcity, Bitcoin has shown its resilience.
These factors, according to Zhao, suggest a more resilient and evolving Bitcoin ecosystem that could positively influence the cryptocurrency’s value and stability post-halving.