The Fear and Greed Index, a popular indicator of the health of the cryptocurrency market, just broke out of the area of fear where it stayed since the end of November 2021. Today it gave a neutral reading of 48 for the first time in nearly 3 months.
The reason for the extreme fear easing on the Fear and Greed Index is due to the cryptocurrency market surge initiated on February 4th. Following the break above the descending trendline, the total cryptocurrency market capitalization (TOTALCAP) temporarily fell back to the $2 trillion level today.
Neutral Fear and Greed Index
Today’s reading of the popular Fear and Greed Index is 48. This is the first neutral value of the index since November 22, 2021, when it showed equal 50 (green circle).
Thus, between November 23, 2021 and February 7, 2022, investors in the cryptocurrency market experienced extreme fear or fear. This negative feeling persisted for 76 days. Today, for the first time in nearly 3 months, market sentiment is back in the neutral zone.
It is worth noting that the last period of such a long domination of fear on the Fear and Greed Index readings took place during the correction in the summer of 2021. Back then, the negative sentiment was in place from May 13 to July 27, 2021, a period of 75 days. So this is an almost identical correction period in the cryptocurrency market.
TOTALCAP hits $2 trillion again
The total crypto market capitalization (TOTALCAP) has been declining since hitting an all-time high of $3 trillion on November 10, 2021. Similar to the price of Bitcoin (BTC), the decline has respected the descending resistance line (blue).
TOTALCAP bottomed at $1.49 trillion on January 24, 2022, and began an upward movement. The breakout initiated on February 4 managed to break through the descending resistance line and attempt to regain the $2 trillion area.
The $1.85-2 trillion area has repeatedly served as an important support level (blue arrows). If TOTALCAP fails to recover it, it could turn into resistance. Therefore, recovering this area and confirming it as support is important for the continuation of the uptrend in the cryptocurrency market.
