Cryptocurrency total market cap reached above $2 trillion. Following the massive rise in cryptocurrency total market cap, the Fear & Greed Index has now shifted to greed
Digital assets in the industry have experienced gains of up to 50% after the current crypto market recovery. As a result, more money has flowed into the market, resulting in an increase in the entire crypto market cap.
After months of languishing below $2 trillion, cryptocurrency total market cap has risen above this coveted level, causing investors’ views to shift as well.
Cryptocurrency Investors Turn Greedy
The Fear & Greed Index is a tool for determining how investors feel about the cryptocurrency market.
It accomplishes this by calculating the sum of a number of data points and displaying the final result on a numbered chart for easy reading.
This index has been fluctuating in and out of the fear area for the last few months, spending more time inside than outside of it.
However, as the market reacts to the current price hike, this pattern has completely reversed.
Cryptocurrencies of all sizes, large and small, moved back into the green over the weekend. Bitcoin, Ethereum, and other cryptocurrencies rose over resistance levels, regaining market control for bulls. This signaled a tipping point in investor mood.
Following the massive rise in cryptocurrency total market cap, the Fear & Greed Index has now shifted to greed. The index, which had been primarily in the fear zone for the previous week, took a sharp turn, rising from 30 to 60 points on the chart.
Given that investors are now seeing digital assets in a more positive light, this number is projected to rise as the market continues to report gains.
What Does This Imply?
Because humans are driven by emotions, they make similar decisions when it comes to their assets. As a result, gauging how investors feel about the market can be a reliable predictor of where the price will go next.
When the index is greedy, as it is right now, investors experience ‘FOMO.’ This is what happens when the value of digital assets rises across the board and investors pour more money into the market for fear of missing out on further profits.
While this can cause asset prices to rise even higher, it is crucial to remember that this is usually only temporary. Because this sharp increase in price can only lead to investors selling their holdings and taking profits.
As a result, cryptocurrency total market cap has fallen as swiftly as it has risen.
On the other hand, when the market is in the fear territory, it is sometimes a good time to accumulate because many investors are cautious about putting money into the market.
Other investors who are familiar with the market can then swoop in and buy coins at a ‘discount price.’
Nonetheless, the market’s current state of greed is a positive indication for crypto. It suggests that the bears have lost control of the market and that digital assets may be on their way to new all-time highs.