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Does, in Bitcoin / Crypto , greed & fear indicator of "extreme greed" always translate to bullish market?
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While there might be a correlation, it is not exclusive. “Extreme Greed” CAN occur during a bearish market.
The “Greed&Fear” indicator is more of an indicator to market sentiment.
I.e. it translates the overall market “demand” and is very susceptible to context.
“Extreme greed” can both refer to people being “greedy” for Bitcoin (i.e. high demand for $BTC) or people being “greedy” for profit (i.e. cashing out). Context is important.
During bearish cycles can “extreme greed” occur as well. This can happen with Crypto who crossover into a lower trading bound unexpectedly whereby the majority of the market sees opportunity to buy-in at extremely low prizes. This will result in a sudden price-surge as available liquidity dries up due to sudden high demand. The indicator can show a sudden lapse from “Extreme Fear” to “Extreme Greed” on very short notice.
It is for this reason that the “Greed&Fear” indicator isn’t used as a serious ratio when doing technical analysis. Other factors play-in as well. “Greed&Fear” only indicate at what the current sentiment is but says nothing of importance on a fundamental or technical level.
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While there might be a correlation, it is not exclusive. “Extreme Greed” CAN occur during a bearish market.
The “Greed&Fear” indicator is more of an indicator to market sentiment.
I.e. it translates the overall market “demand” and is very susceptible to context.
“Extreme greed” can both refer to people being “greedy” for Bitcoin (i.e. high demand for $BTC) or people being “greedy” for profit (i.e. cashing out). Context is important.
During bearish cycles can “extreme greed” occur as well. This can happen with Crypto who crossover into a lower trading bound unexpectedly whereby the majority of the market sees opportunity to buy-in at extremely low prizes. This will result in a sudden price-surge as available liquidity dries up due to sudden high demand. The indicator can show a sudden lapse from “Extreme Fear” to “Extreme Greed” on very short notice.
It is for this reason that the “Greed&Fear” indicator isn’t used as a serious ratio when doing technical analysis. Other factors play-in as well. “Greed&Fear” only indicate at what the current sentiment is but says nothing of importance on a fundamental or technical level.
Forwarded from Watcher Guru
Forwarded from Watcher Guru
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Forwarded from Watcher Guru