Bull market, finance and business concept
Bitcoin and other cryptocurrencies in the market have been miserable price action lately. And this despite the fact that the Fear & Greed Index shows that investors are still very greedy when it comes to digital assets. So why are prices still falling?
Investors await CPI data release
The latest version of the United States Consumer Price Index (CPI) is set to be released later this week, and crypto investors appear to be waiting before taking any action. The release will be on May 10, 2023 and will show whether inflation has risen, fallen or stayed the same in the country, which can have major implications for financial markets.
Should inflation rise, the Fed could revert to a hawkish stance that would be brutal for risky assets like Bitcoin. However, should inflation numbers come in much lower, the Fed is expected to adopt a dovish stance, leaving plenty of room for investors to take more risk.
Finally, if inflation were to remain the same, it is safe to assume that there would not be a major impact on the financial market and crypto market more broadly. However, what it could do would be to sustain the current market sentiment and if the bulls continue to prevail it would likely build momentum for an uptrend versus a downtrend.
Bitcoin Fear & Greed Index remains strong
The Bitcoin Fear & Greed Index is still pointing to the strong bullish sentiment among investors in the market as it continues to trend towards “greed”. This shows that crypto investors are still looking for more upside, but the market’s decline shows a degree of caution despite this bullishness.
Interestingly, the market also ended last week strong at these levels, but today’s reading of 60 on the index suggests a waning of greed. Still, it remains at a fairly high level compared to 2022 numbers.
Fear & Greed Index stays in Greed | Source: alternative.me
A market reversal from here could send the Fear & Greed Index back towards extreme greed. But while this level of greed is welcome in the market due to rising prices, it has been known to mark the peak of market rallies, leaving a bittersweet aftertaste in investors’ mouths each time.
Bitcoin’s price is currently trading below $28,000 after surpassing $31,000 over the last month. It is posting 2.97% losses on the daily chart, bringing its market cap back down to $541 billion.
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