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Bitcoin (BTC) has topped the closely watched $50,000 level for the first time since mid-May in an ongoing recovery in the cryptocurrency market from a disorderly rout just three months ago.
CNBC reported that Bitcoin hit $50,000 on Sunday, August 22, 2021, @ 10:40 p.m. ET, on Sunday, reaching a more than 3-month high as the cryptocurrency continues to rebound.
Two major announcements are reported to be positive for the cryptocurrency space. In the past week, Coinbase stated that it would buy $500 million in cryptocurrency on its balance sheets further to allocate 10% profits into its crypto assets portfolio.
Another announcement is from PayPal, which stated, it would launch its service to permit people to Buy, HODL, and sell digital currencies in the UK.
The $50,000 was a psychologically important mark. There has been a fresh round of institutional interest, interest from retail investors, and adoption, which created an overall outlook to be bullish.
Bitcoin trading is really profitable, and in order to achieve success, you’d have to keep emotions out.
The fear and greed index is a tool, which some investors use to assess the market sentiment. It is dependent on the idea that “excessive fear” will lead to assets trading, well below their intrinsic values; however, greed can lead to stocks getting bid up far above what they actually should be worth.
Warren Buffet in the past stated, “Be fearful when others are greedy and greedy when others are fearful.” When the fear and greed index hits a value of 90, it signals extreme greed. This is also indicative of stocks being overvalued.
John Templeton expressed, “The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”
Cryptocurrency price is, for the most part, driven by investor sentiment. The Market Mood Index (MMI) is a real-time investor sentiment indicator used to identify the market’s current mood. This index has five zones depending on the value, and it represents extreme Greed (71-100), Greed (51-70), Neutral (50), Fear (30-49), and Extreme Fear (0-29).
However, the widespread thought is that sentiment can be tricky. There is not a single sentiment indicator that can dictate when to buy or when to sell. Most of the time, the sentiment is somewhere in the middle, and it is never in extreme fear or greed. Rarely does greed and fear touch extremes.
