The Pomp Letter: The Fear & Greed Index Flashed Another Sign Over the Weekend

After a roaring start to the year, cryptocurrency prices have languished in recent weeks. They’ve even trended lower. Bitcoin, the leader of the space, topped $70,000 earlier in the year. But in the past week, its prices have declined closer to $55,000.

Investor sentiment is now also moving to its lowest levels since late 2022. That’s right around the time bitcoin bottomed around $17,000 before starting to trend far higher. Sentiment also marked the March 2024 peak.

What does this mean for investors now? With sentiment looking bearish, it may be a counterintuitive time to buy.

In the crypto space, sentiment includes factors such as social media, surveys, and search engine trends.

These trends suggest that investor interest has moved elsewhere. While that could mean an explosive move off of pessimistic levels, it would take a bigger shift to mark a new bull rally.

Until that happens, patience is likely the name of the game. Typically, bitcoin soars a few months after its halving period. So far, it’s on track for a post-having decline that comes first, as it has in prior cycles.

Once bitcoin starts to trend higher, other cryptos will likely start to take off too. Interested investors should look for opportunities to accumulate now. And to have a plan in place to take some profits off the table when sentiment gets overly bullish.

To look at the full methodology behind bitcoin’s fear and greed index, click here.