The Crypto Fear & Greed Index rose to 22 on Thursday compared to 10 points the day before amid a slight improvement in investors’ sentiment in the crypto space.
The fear and greed index is a technical analysis tool that measures investors’ sentiment in the financial market based on different indicators like volatility, trading volume, and social media trends.
Although the rise indicates that some of the pessimism seen in the market in recent times is abating, the current index is still in an “extreme fear” territory.
The present state indicates that many investors are still apprehensive and unsure of the market’s trend. Extreme fear is usually seen when prices are fluctuating or going lower, prompting traders to hold back on making investments until a stable environment is achieved.
Crypto rally extends despite Iran–Israel tensions
The crypto market extended its rally for a second consecutive day on Thursday, supported by growing institutional demand, even as geopolitical tensions between Iran and Israel continue to create uncertainty in global markets.
Bitcoin climbed about 3 percent in the last 24 hours, trading close to $73,000 at $72,992 at the time of writing. Data from CoinMarketCap shows that the cryptocurrency is currently around 7.2 percent higher than its weekly average, suggesting that buying momentum is gradually picking up.
What is driving the market up?
Analysts say the broader market now appears to be moving from a phase of heavy selling towards a period of stabilization after the correction earlier this year.
One of the key drivers of the improving sentiment is the increase in accumulation by the larger institutional players. In fact, Michael Saylor’s company, Strategy, has accumulated an additional 3,015 Bitcoin from February 23 until March 1.
In the United States, the politics surrounding the crypto space have also helped improve the sentiment. U.S. President Donald Trump has called on lawmakers to speed up the process of the CLARITY Act, which is a bill that seeks to create clear guidelines for the crypto market. Many people view the regulation of the crypto space as an essential move toward the institutionalization of the industry.