This Unique Thing Happened to Bitcoin (BTC) for the First Time in a Long Time
- Bitcoin Volatility: Bitcoin’s price swings as of late might have led to changes in the BTC Fear and Greed Index.
- Bitcoin Halving Event: The upcoming halving in April 2024 is anticipated to impact the asset’s supply and demand, possibly affecting investors’ sentiment.
No More Greed
The historic approval of spot Bitcoin ETFs in the United States and all the surrounding drama have taken their toll on Bitcoin, which soared to $49,000 on January 11 but later descended to its current level of $42,600 (per CoinGecko’s data).
The significant volatility might be one factor that has affected the popular BTC Fear and Greed Index. The metric, whose result is based on social media buzz, surveys, market momentum, and other elements, dropped to a “Neutral” territory today (January 15) for the first time since October 23, 2023.
Before that, the index was sitting comfortably in the “Greed” or “Extreme Greed” zone due to Bitcoin’s impressive performance in Q4, 2023, and the start of 2024. Remember that the asset’s price skyrocketed by over 150% last year, with the final quarter alone witnessing a 55% increase.
Is ‘Greed’ Back on the Horizon?
Considering its close relationship with BTC’s price, many might anticipate the Fear and Greed Index’s return to “Greed” or “Extreme Greed” if the asset benefits from several upcoming events. One example is a possible pivot from the Federal Reserve on its aggressive anti-inflationary politics.
America’s central bank began raising interest rates in March 2022 in an attempt to combat the galloping inflation rate in the country. The current benchmark ranges from 5.25% to 5.5%, with rates remaining unchanged after the latest FOMC meeting.
Furthermore, the Fed hinted at three interest rate cuts this year, which has sparked enthusiasm among the crypto community. This move is seen as a bullish factor for the digital asset industry, particularly Bitcoin, as it would make borrowing money cheaper and enable more investors to engage in risk-on assets.
Another noteworthy factor is the BTC halving, scheduled for April 2024. It halves the miners’ rewards, leading to reduced supply growth that could trigger a price rally for the asset (assuming the demand remains stable or increases). Several experts, including Robert Kiyosaki (the author of the bestseller “Rich Dad Poor Dad”), have encouraged people to closely monitor that event.
Those interested in learning more about it can check out our dedicated video below: