Bitcoin Soars as Crypto Fear & Greed Index Nears Key Threshold
Bitcoin has surged to a historic peak, driven by safe-haven investments, a spike in exchange-traded fund inflows, and a rise in the Fear and Greed Index.
Summary
- The recent rally in Bitcoin signifies a resurgence of investor confidence, prompted by favorable market conditions, expected rate cuts from the Federal Reserve, and heightened interest in spot ETFs.
- This blend of positive macroeconomic indicators, seasonal resilience, and an increased appetite for risk has placed BTC on a trajectory for another potential rise, suggesting that the leading cryptocurrency may be entering a new era characterized by institutional-led momentum.
Bitcoin Price Surge Fueled by Rising Crypto Fear and Greed Index
The value of Bitcoin (BTC) has continued to climb as investors embrace a risk-tolerant attitude. This transformation is evident in the rising Crypto Fear and Greed Index, which has moved from the fear zone of 39 in September toward the greed zone at 60.
Typically, when the index trends upwards, Bitcoin and other cryptocurrencies experience significant gains, with momentum accelerating as it nears the extreme greed zone.
The increase in BTC’s price is also linked to its status as a safe-haven asset, akin to gold. Importantly, inflows into spot BTC ETFs have picked up due to concerns about a potential government shutdown.
As per SoSoValue data, these ETFs have amassed over $3.2 billion in assets, bringing total inflows to more than $60 billion. BlackRock’s IBIT ETF now has over $96 billion in assets, placing it among the top 20 largest ETFs worldwide.
With investors looking forward to a Federal Reserve rate cut this month, Bitcoin’s price has achieved unprecedented levels. The Fed has already decreased rates by 0.25%, establishing the benchmark between 4.0% and 4.25%.
The chances of further cuts grew after the release of disappointing employment figures from ADP and the Bureau of Labor Statistics. The BLS report revealed that the number of unemployed individuals surpasses job openings.
Moreover, ADP’s analysis indicated a loss of 36,000 jobs in September, following a decline of over 3,000 the previous month. These statistics hint at a weakening labor market, potentially prompting the Fed to take action.
Seasonal patterns have also played a role in the ongoing rise of Bitcoin’s price, as historically, Bitcoin performs well in October and the fourth quarter.
BTC Price Technical Analysis
The weekly chart shows that BTC has maintained a strong bullish momentum this year, currently reaching a record high of over $125,500, moving beyond the upper limit of the bullish flag pattern.
Bitcoin has also attained a crucial pivot reversal point as per the Murrey Math Lines tool and remains above all moving averages.
Consequently, the most likely scenario suggests ongoing upward movement as bulls target the key resistance level at $150,000. Exceeding this point could trigger further gains, potentially reaching an extreme overshoot target of $175,000.