The bitcoin market is neutral, what impact does this have on the price?

Bitcoin investors (find out how buy Bitcoins) have maintained neutral sentiment on the market in the last days of the week. This means that they are neither thinking about selling too much out of fear, nor about buying too much out of greed or a bullish belief, implying some stability in the price.  

Market analysis 

This is underlined by the Alternative explorer, which measures the fear and greed index of the cryptocurrency market by collecting different data on a daily basis. These are price volatility, purchase volumes, social media comments, cryptocurrency dominance, and Google Trends. In this way, it analyzes the information obtained and determines the attitude of investors on a scale of 1 (extreme fear) to 100 (extreme ambition).  

Currently, the fear and ambition index of the cryptocurrency market, which is mostly dominated by bitcoin, is on a scale of 52. In other words, neither overly bullish nor bearish, but rather that investors are calm and awaiting the next ones. moves. 

In a calm market, where there are neither too many purchases nor too many sales, the price tends to reach a certain stability. As long as it remains neutral, there is not enough trading force to make it go up or down. However, the calm doesn't last in any asset, let alone a highly volatile one like bitcoin, and sooner or later there will be a strong move up or down, experts say.  

After several days of fear, bitcoin investors are reassured  

The stabilized move towards the neutral line breaks with the fear of bitcoin investment that has prevailed for most of the past month. As seen in the chart below, the market was fearful until a fortnight ago when it began to raise its expectations from an average of around 21 to a peak of 60.

Since then, it has dropped slightly and has remained in the 50s, demonstrating market calm and some stability for the bitcoin price. This is something that is also affected by the volatility of its value which has shrunk as it has shown consolidation above $ 46.000. 

The alternative indicates that a very low number on this metric, as it was until recently, could be a buying opportunity. This is because perhaps investors are having a very high sense of concern which can then be broken by increased expectations.  

The opposite is when the market gets too greedy, causing the price to go up by buying more. This can end in a correction, i.e. a drop in prices when the exaggerated purchasing power is reduced and the FOMO (fear of being left out) is dismantled.  

Carlos Maslaton prefers to do his research on market sentiment rather than relying on a metric. He does this by hearing or seeing what people say about it. 

Research like Maslatón's or metric tools like Alternative allow you to see the big picture of the psychology of the bitcoin market at any time. The best thing to do is to do your research as broadly as possible.