Bitcoin sentiment remains near extreme fear—a green sign for a recovery?

The data shows that Bitcoin sentiment is now not far from the extreme fear zone, which could be a positive signal for the recovery of the asset. Bitcoin's Fear and Greed Index is deep in the Fear Zone The "Fear and Greed Index" is an indicator given by Alternative that tells us about the average sentiment of traders in the Bitcoin and cryptocurrency markets in general. The index uses the data of these five factors to determine market sentiment: trading volume, volatility, market cap dominance, social media sentiment, and Google Trends. To denote sentiment, this indicator uses a numerical scale from 0 to 100. All values below 47 correspond to feelings of fear, while values above 53 correspond to feelings of greed. The following is the current situation of this industry according to the Fear and Greed Index:

As can be seen in the chart above, the Bitcoin Fear & Greed Index is currently valued at 29, which means that investors in general share the same fear sentiment, which is particularly strong. In fact, the value of the current indicator is so deep that it is quite close to a special zone called extreme fear (25 xuống). Shortly before that, sentiment had improved due to news regarding the suspension of tariffs for 90 days and subsequent price increases. But it seems that the hurdle BTC faced during the recovery has worsened the market mood once again.

So far, BTC's pullback has been small, but sentiment has almost returned to extreme levels of fear. This could be a sign that the previously restored confidence is still quite weak. However, this fact may not actually be a bad sign for Bitcoin, historically. In the past, the price of this asset tended to move in the opposite direction to the expectations of the crowd. The likelihood of such a reverse move also only increases as investors become more certain. Extreme fear occurs when fear is strongest, so a bottom used to happen when the Fear & Greed Index was in that zone. There is also a similar area on the greed side, called extreme greed. Naturally, that's where peak formation is likely. With market sentiment currently near extreme fear zone, the current rally could be a good sign, at least from a mixed point of view.