The crypto market sentiment dropped drastically by 2022. Most of it was triggered by a number of companies collapsing, sending market costs right into a downward spiral. This noticed investor sentiment bouncing between concern and excessive concern for the higher a part of H2 2022. However, there was a flip within the tide as bitcoin leads the market on one other rally. Investor sentiment has now returned to pre-LUNA crash ranges.
Crypto Investor Sentiment Makes Its Way Back Into Green
After sitting within the concern territory proper by the tip of 2022, the Fear & Greed Index has now moved into the greed territory for the primary since April 2022. More apparently, the index is at present sitting at ranges across the time for the reason that LUNA crash. This was when the market was nonetheless reeling from the 2021 rally earlier than the Terra collapse triggered the dreaded crypto winter.
Now, as costs are recovering, so has investor sentiment. It is at present sitting at a rating of 55 on the Fear & Greed Index, displaying a big enchancment over the past couple of months. What’s extra, the index exhibits a gradual enhance over the past week.
Sentiment returns to March 2022 ranges | Source: alternative.me
It is not struggling to interrupt out of the impartial territory, indicating that buyers are actually comfy in accepting this as a bull rally, albeit a brief one. It additionally factors to heightened shopping for sentiment as buyers rush to benefit from the excessive costs and clock in some income.
The index is now at an virtually 100% enhance from the place it closed out within the final month of 2022 with a rating of 28. This affords a whole 180-degree flip in how buyers are viewing the market by this time.
Crypto Ending The Month Better Than It Started
The crypto market is already in a significantly better place than it was when January 2023 first began. In lower than 30 days, the market has since added over $200 billion to its market cap, bringing it again to ranges not seen since earlier than the FTX collapse.
This much-needed restoration is a step in the best route and it’s herding January towards a degree the place it completed the month higher than it began it. And because the shopping for sentiment round main cryptocurrencies resembling Bitcoin and Ethereum have ballooned, the market should have extra development to come back.
The crypto complete market cap is now sitting just under the $1 trillion level however nonetheless exhibits potential for extra upside. As the Fed is predicted to not hike rates of interest any additional, it turns into a chief development surroundings for threat belongings resembling cryptocurrencies.
Total market cap provides over $200 billion in January | Source: Crypto Total Market Cap on TradingView.com
Follow Best Owie on Twitter for market insights, updates, and the occasional humorous tweet… Featured picture from Masterworks, chart from TradingView.com