Over the past week, the Fear & Greed Index fell from 63 to 51, while bitcoin declined from $83K to $80K. The market has been in neutral territory for six consecutive days, after spending almost all of the past two months in greed territory.
TL;DR
Greed has faded, but fear has yet to emerge. We examine how persistent this cooling is and what index reading would put the market in fear territory.
Bitcoin: Price & Sentiment Regimes
Since August 20, when bitcoin rallied sharply after the summer's fear, the market has remained in greed territory almost continuously. Moves into neutral territory lasted one or two days. The current neutral streak is now in its sixth day, while no such streak had lasted more than three days since May.
The index's neutral range runs from 45 to 55. Yesterday, the index dipped to 48, its lowest reading since August 19. If it falls below 45, the market will enter fear territory for the first time since mid-August.
Bitcoin: Fear & Greed Index
Daily readings fluctuate sharply, so the averages show the trend more clearly. The 30-day average has fallen from a peak of 67 in early October to 61. The 90-day average is rising and stands at 57.
Over the past week, the gap between the averages narrowed from 10 to 4 points. The 30-day average has been above the 90-day average since July 31. If it falls below, it will show that the cooling has persisted and is no longer a brief pause.
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FAQ
Does a neutral reading mean the price will fall soon? No. The index measures participants' sentiment, not price direction. Neutral territory means only that greed has faded and fear has yet to emerge.
Does the rising 90-day average mean sentiment is improving? No. It is rising because the summer's fear readings are dropping out of its calculation window. Current readings are already below the average.
Conclusions
Market sentiment has cooled, the index is in neutral territory for the sixth consecutive day, and the 30-day average is declining. A return above 55 would show that greed is returning. The main risk is a drop below 45 alongside the 30-day average falling below the 90-day average. The market would then shift from caution to fear.
Live Charts
Explore the metrics behind this brief with live, auto-updating charts:
Fear & Greed Index - Composite market sentiment for risk appetite and sentiment extremes.
NUPL - Net unrealized profit/loss across holders, mapped into cycle sentiment phases.
Supply in Profit - Share of circulating supply in profit as a cycle-phase and euphoria gauge.
STH-SOPR - Short-term holder profit/loss behavior around the 1.0 breakeven threshold.