Cryptocurrencies

The Pomp Letter: The Fear & Greed Index Flashed Another Sign Over the Weekend

Posted on by Andrew Packer

After a roaring start to the year, cryptocurrency prices have languished in recent weeks. They’ve even trended lower. Bitcoin, the leader of the space, topped $70,000 earlier in the year. But in the past week, its prices have declined closer to $55,000.

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    • Investor sentiment is now also moving to its lowest levels since late 2022. That’s right around the time bitcoin bottomed around $17,000 before starting to trend far higher. Sentiment also marked the March 2024 peak.

    What does this mean for investors now? With sentiment looking bearish, it may be a counterintuitive time to buy.

    In the crypto space, sentiment includes factors such as social media, surveys, and search engine trends.

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    These trends suggest that investor interest has moved elsewhere. While that could mean an explosive move off of pessimistic levels, it would take a bigger shift to mark a new bull rally.

    Until that happens, patience is likely the name of the game. Typically, bitcoin soars a few months after its halving period. So far, it’s on track for a post-having decline that comes first, as it has in prior cycles.

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    • Once bitcoin starts to trend higher, other cryptos will likely start to take off too. Interested investors should look for opportunities to accumulate now. And to have a plan in place to take some profits off the table when sentiment gets overly bullish.

     

    To look at the full methodology behind bitcoin’s fear and greed index, click here.