The Crypto Fear and Greed index shows investors have become extremely greed above 92. Is there an impending market correction?
As the global crypto market capitalization crosses $2.7 trillion, inching closer to an all-time high, a market correction will likely occur soon. The crypto fear and greed index proves this, with extreme greed reaching as high as 92.
The crypto fear and greed index is a sentimental indicator used to determine traders’ emotions at any time. The index features three ranges – fear (0-49), neutral (50), and greed (51-100). A fearful market ensues when investors are worried and sell their assets, causing a price drop. The greed index is characterized by investors’ thirst for more gains. A greed index is often accompanied by a market correction where crypto prices take a slight downturn after a significant surge.
Extreme Greed Consumes Crypto Market
Several investors have taken a greedy stance since the global crypto market began flourishing from the ongoing bull run over the past few weeks. A chart from the price-tracking platform CoinMarketCap shows that this trend has been ongoing for some time now.
According to the chart, the greed index has consumed the crypto market over the past month. On February 28th, the metric went from greed to extreme greed and has remained there until now.
With prominent crypto assets like Bitcoin, Ethereum, and Solana seeing significant rises, more investors remain bullish and ready for more profits.
What Role Does Bitcoin Halving Play?
Notably, the upcoming Bitcoin halving event will play a role in readjusting the market. The Bitcoin halving event is the periodic slashing of mined BTC received as block rewards. The mechanism helps to curb inflation while boosting demand, hence the asset’s price. On April 19th, the block reward will reduce from 6.25 BTC to 3.125 BTC.
Historic record shows that the Bitcoin halving event usually brings about a market correction, causing crypto prices to decrease. On the bright side, a massive bull run often comes months after the halving event.
