Data shows the Bitcoin Fear & Greed Index has surged back into the neutral zone after the recovery rally in the cryptocurrency’s price.

Bitcoin Fear & Greed Index Now Has A Value Of 51

The “Fear & Greed Index” refers to an indicator created by Alternative that measures the average sentiment present among traders in the Bitcoin and wider cryptocurrency markets. The metric uses the data of the following five factors to determine the investor mentality: trading volume, market cap dominance, volatility, social media sentiment, and Google Trends.

The index uses a numerical scale running from zero to hundred for representing this sentiment. All values above 53 correspond to greed among the investors, while those below 47 to fear. The region between the two cutoffs naturally corresponds to a net neutral mentality.

Now, here is how the current Bitcoin market sentiment is like, according to the Fear & Greed Index:

As is visible above, the indicator has a value of 51, which suggests the trader sentiment is almost exactly in the balance right now. This is a notable change in market mood compared to just a few days ago.

As displayed in the chart, the Fear & Greed Index was inside the fear zone during the past few days. The despair among the traders was a result of the bearish price action that BTC had recently faced.

At one point, the indicator even fell to a low of 22, reflecting a state of “extreme fear.” This zone, which occurs below 25, corresponds to investors being the most bearish toward the market. There is a similar region for the greed side as well, called the “extreme greed,” situated above 75.

Historically, the extreme sentiments have been quite significant for Bitcoin and other cryptocurrencies, as they are where major tops and bottoms have tended to form. The relationship has been an inverse one, however, meaning extreme fear is where bottoms form, while extreme greed facilitates tops.

Since the extreme fear low earlier in the month, BTC has been on the way up, a potential indication that the contrarian signal of the sentiment may once again be in action.

The cryptocurrency has extended its recovery in a sharp manner during the last couple of days, which may be a potential reason why the Fear & Greed Index has surged back to the neutral territory now.

Though, for now, Bitcoin traders are still undecided on whether bullish action will follow next. It now remains to be seen whether they will embrace greed, or continue to be hesitant about the recovery.

BTC Price

At the time of writing, Bitcoin is floating around $114,900, up 3.6% over the last seven days.

Data shows cryptocurrency short investors have suffered large liquidations during the past day as Bitcoin and altcoins have made a recovery.

Bitcoin, Ethereum Have Surged In The Last 24 Hours

Bitcoin and other cryptocurrencies have witnessed a rally during the past day, breaking away from the slump the market had earlier fallen into. At the height of this surge, Bitcoin broke past $116,000, while Ethereum touched $4,250.

The assets have since seen a small retracement. The chart below shows how BTC’s latest trajectory has looked.

At its current price of $115,400, Bitcoin is up about 4% on the weekly timeframe. Similarly, Ethereum at $4,160 is in a profit of 3.4%. Most other digital assets have seen similarly positive returns, although there are some outliers like Tron, which is down more than 7%. The market-wide recovery during the past day has meant that a large amount of short liquidations have piled up on the derivatives exchanges.

Crypto Market Liquidations Have Totaled At $467 Million

According to data from CoinGlass, about $467 million in cryptocurrency-related derivatives contracts have been liquidated over the last 24 hours. A contract is said to be “liquidated” when its platform forcibly shuts it down after it accumulates losses of a certain degree (as defined by the exchange).

Given that coins across the board have rebounded, the contracts crossing this threshold would mostly be the short ones. And indeed, the data would confirm so.

As is visible above, liquidations related to bearish cryptocurrency bets have reached $358 million in this window, representing 76.6% of the total flush in the sector. Bitcoin led the liquidations with $177 million in contracts involved, while Ethereum contributed the second most with $130 million in contracts. Out of the rest, Solana witnessed the largest flush at $34 million.

In some other news, Bitcoin spot exchange-traded funds (ETFs) have observed a notable amount of inflows over the past month, as CryptoQuant community analyst Maartunn has pointed out in an X post.

Spot ETFs refer to investment vehicles that allow investors to gain exposure to an asset without having to directly own it. The US SEC approved BTC spot ETFs in January of 2024. Here is the chart shared by the analyst that shows how the 30-day netflow for these vehicles has fluctuated since:

As displayed in the above graph, Bitcoin spot ETFs have seen inflows of $4.7 billion during the past month. Ethereum spot ETFs, which gained approval in mid-2024, have also enjoyed inflows in this period, although their value of $983 million is significantly less than BTC’s.