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Crypto Fear and Greed index hits 16th month high ahead of the Fed meeting

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TL;DR

  • Bitcoin surges above $28,000 ahead of the Fed meeting
  • Crypto Fear and Greed index stands at 68 registering a 16-month high data
  • Blockchain.com data shows Bitcoiners had 88.50% profitable days compared to the current market price

The Crypto Fear and Greed Index has reached its highest level of the year, surpassing levels not seen since November 2021, when Bitcoin reached its all-time high. The Index was updated on March 21 and revealed a score of 68, placing it firmly within the “Greed” region.

According to CoinMarketCap, Bitcoin surpassed $28,000 for the first time in nine months, trading between $27,300 and $28,350 over the past twenty-four hours. The current price of Ethereum is $1,816.62, with a 24-hour trading volume of $10,406,390,298. In the last 24 hours, Ethereum has gained 2.86%.

Crypto’s Fear and Greed index stands at 68

The goal of the Crypto Fear and Greed Index is to quantify the current “emotions and sentiments” regarding Bitcoin and the crypto market, with a maximum score of 100. According to Coingecko, the last time the index recorded a score above 68 was on November 16, 2021, just days after Bitcoin’s all-time high of over $69,000 was recorded on November 10, 2021.

Since the collapse of Silicon Valley Bank and the subsequent disruption of the traditional financial system, sentiment surrounding Bitcoin and crypto has been bullish. Bitcoin has reached $28,000 for the first time since June 2022, according to data from Coingecko, after seven days of gains of approximately 27.8%.

Goldman Sachs has named Bitcoin the best-performing asset this year, with a 51% increase in year-to-date absolute returns. In a March 17 note, the asset manager revealed that Bitcoin’s total returns YTD have outpaced those of information technology, gold, the NASDAQ 100, and the S&P 500, among others.

Source: Goldman Sachs

BTC’s performance since its inception

Bitcoin’s historical price performance demonstrates that a hard limit on total supply, as well as seamless global usability, are essential for it to become a store of value. According to Blockchain.com data, Bitcoiners had 88.50% of profitable days compared to the current market price at the time of writing.

In the 4,593 days that Bitcoin has been a tradable asset, BTC hodlers have had 4,065 profitable days, challenging the historical narrative of crypto’s depreciating volatility. As a result, holding Bitcoin is demonstrably profitable over time.

Source: Blockchain.com

As the table above shows, only 531 (11.56%) of the 4,593 days were unprofitable for long-term investors. The unprofitable days are between December 28 and June 12, 2022, when the price of Bitcoin was above the range of $26,246.58 to $28,344.5.

The revelation emphasizes the significance of understanding Bitcoin’s market cycles and explains why investors should avoid buying at market peaks and selling at market troughs. Nevertheless, some traders prefer daily trades on crypto exchanges for much smaller but more consistent profits.

Crypto market’s performance ahead of the Fed meeting

Wednesday at 18:00 UTC, the Fed will release its rate decision and quarterly economic projections. After a half-hour, Powell will speak at the post-meeting press conference and provide additional insight into the future course of action.

According to market analysts, the Fed must at least pause, lest banking issues worsen. Accordingly, they suggest that the most powerful central bank in the world should prioritize banking sector stability over inflation on Wednesday and leave interest rates unchanged.

Since regulators took over Silicon Valley Bank (SVB) on March 10, this has been the sentiment on the crypto market. Bitcoin has gained over 40% since then, in part due to expectations that bank failure will force the Federal Reserve (Fed) to abandon its rate hike cycle, which shook risk assets last year. 

Since March 2022, the central bank has increased interest rates by 450 basis points. A 25 basis point [bps] rate hike will increase the benchmark borrowing cost to the range of 4.75 percent to five percent, and traders positioned for a pause may reduce their bullish exposure to bitcoin.

A pause could cast doubt on the effectiveness of the announced measures and cause panic. Since the demise of SVB, the Fed has established the Bank Term Funding Program and increased the frequency of its dollar swap lines from weekly to daily in order to shore up the global financial system.

In other news, the United States Supreme Court will hear arguments in its first-ever crypto-related case on Tuesday. At the hearing, crypto exchange Coinbase (COIN) lawyers will try to persuade the nine justices to halt a pair of class-action lawsuits filed against it.

Though the case involves crypto, it is not about crypto itself. Instead, the case is a fairly esoteric procedural dispute over whether a lawsuit can be filed in federal court. In contrast, one party – in this case, Coinbase – seeks to have the dispute resolved through arbitration.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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