Bitcoin has been on a wild ride lately, and it seems like the ups and downs are leaving their mark on the BTC Fear and Greed Index. The upcoming halving event in April 2024 is adding to the anticipation, bringing potential impacts on supply and demand, which could sway investor sentiment.
The recent approval of spot Bitcoin ETFs in the United States stirred up quite a frenzy, pushing Bitcoin to a high of $49,000 on January 11. However, the excitement was short-lived as it descended to its current level of $42,600, as per CoinGecko’s data.
This rollercoaster of a journey may be a key player in the BTC Fear and Greed Index. The index, influenced by social media chatter, surveys, market momentum, and other factors, has dipped into “Neutral” territory on January 15, marking the first time since October 23, 2023.
Before this, the index was comfortably lounging in the “Greed” or “Extreme Greed” zone, fueled by Bitcoin’s stellar performance in Q4 2023 and the beginning of 2024. With a whopping 150% increase in the asset’s price last year, and a 55% surge in the final quarter alone, it’s no wonder the index was riding high.
Is ‘Greed’ Making a Comeback?
Given its close ties to BTC’s price, the Fear and Greed Index could swing back into “Greed” or “Extreme Greed” territory if Bitcoin benefits from upcoming events. One such potential game-changer could be a shift in the Federal Reserve’s aggressive anti-inflationary stance.
The Federal Reserve initiated interest rate hikes in March 2022 to tackle inflation in the United States. The current benchmark is 5.25% to 5.5%, with no changes after the latest FOMC meeting. The Fed’s hint at three cuts this year has sparked excitement in the crypto community. If implemented, this move could be bullish for the digital asset industry, making borrowing money cheaper and encouraging more investors to venture into risk-on assets like Bitcoin.
Another noteworthy factor is the BTC halving scheduled for April 2024. This event slashes miners’ rewards in half, potentially causing a reduction in supply growth and triggering a price rally for Bitcoin, assuming demand remains steady or rises. Renowned experts, including Robert Kiyosaki, author of the bestseller “Rich Dad Poor Dad,” have advised keeping a close eye on this impending halving event. To delve deeper into the details, check out our dedicated video below.