The massive decline they embodied in the crypto market for many weeks is slowly coming to an end, with the crypto fear and greed index returning above 50. Moreover, the trade volume was also appreciated. Below, we will look comprehensively into this and examine how it has impacted the market.
Fear and Greed Index Returns Above 50
The crypto fear and greed index is a metric within a crypto market that shows the level of greed or fear in the market. In other words, this metric helps to gauge the willingness of investors to buy in the crypto market or their reluctance to sell. How this metric works is from the number 0 to number 20 is extreme fear while from the number 20 to number 40 is fear. However, the numbers 40 to 60 are where the neutral is and anything above 60 is greed while above 80 is extreme greed.
Looking at the weekly chart of the fear and greed index, it has been below 50 for 6 days, while the remaining one day was when it crossed 50. This event happened on the 16th of July after the fear and greed index hit 57, signifying the crypto maker was getting close to greed.
More Increase in Crypto Trades Volume
The recent development of the fear and greed index coming above 50 is mainly due to investors coming out to make massive trades. The current landscape of the total crypto trade volume is quite different from what it was seven days ago. As of July 7th, the crypto trade volume was at $78.8 billion.
However, there was a further decline to $58 billion on July 11th, but this was not the lowest of the decline in the past seven days as it gets even worse. By July 13th, the trade volume of the crypto market reduced to less than $50 billion and reached as low as $39 billion. Nevertheless, the big break came on July 15th when the trade volume crossed $80 billion for the first time in many days. In fact, it is currently at over $92 billion with over 120% increase in the past 24 hours.
Impact of Crypto Fear and Greed Index Returns to Neutral and Increase in Trade Volume
The crypto fear and greed index returning to a neutral position and the trade volume surpassing $86 billion had a positive impact on cryptocurrencies. One is that the apex cryptocurrency, Bitcoin, is back above $60k, surging to almost $65k, with an 11% increase in the past week. Moreover, other cryptocurrencies such as Ethereum, BNB, Solana, XRP, and Dogecoin are all having good performances in the market following the bounce back.
Conclusion
There was a little bit of rest from the chaos that engulfed the crypto market in the past weeks, with the fear and greed index returning above 50 in a neutral position. In fact, there are expectations that it may soon increase to the greed level above 60. Moreover, there’s also an increase in the trade volume, with over $86 billion in trade made in less than 24 hours. These new developments affected the whole crypto market, with Bitcoin, Ethereum, and even memecoins recording increases. But only time will tell if this will last.
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