Crypto investors are once again becoming greedy this year as Bitcoin (BTC) and other altcoins rebound. The closely watched crypto fear and greed index rose to the greed zone of 63, its highest point in over three weeks.
Crypto fear and greed index rose
This trend happened as market conditions improved this month, with Bitcoin rising by over 20% from its lowest point in July. Other tokens like Ethereum and Solana, and meme coins like Dogwifhat and Pepe also launched higher.
Similarly, sentiment among traders has jumped. Data by Santiment on-chain data platform shows that traders have become more confident this month, with sentiment soaring to its highest point in 16 months.
Several important catalysts have been involved in these moves. First, the SEC approved spot Ethereum ETFs for trading last week, a few months after it approved spot Bitcoin funds. The expectation is that these funds will see robust inflows like Bitcoin did. Data shows that Bitcoin ETFs have had over $17 billion in net inflows this year.
Federal Reserve rate cuts
In addition, there is rising hope that the Federal Reserve will start cutting interest rates in the next few months. Besides, US inflation has dropped, and there are signs that the labor market is softening as the unemployment rate has risen to 4.1%.
Lastly, the crypto fear and greed index has rallied because of the limited impact on the German government and Mt. Gox liquidations. While Bitcoin tumbled to $53,700 in July as Germany sold its coins, it quickly bounced back as the market absorbed these coins.
Meanwhile, a major Bitcoin conference took place in Tennessee, where Donald Trump announced that the US would hold BTC as a reserve asset in his administration. In the same event, MicroStrategy’s Michael Saylor predicted that Bitcoin would surge to $49 million by 2045.
At the same time, on-chain metrics showed that the crypto industry was still in a bull market that could run until mid-2025.
Also, Bitcoin price has formed a bullish chart pattern known as a falling broadening wedge. This pattern is characterized by two falling and broadening trendlines. As shown in the chart below, the BTC price has now moved above the upper side of this wedge, meaning that Bitcoin could continue rising in the following days.
This rebound is happening as Bitcoin has moved into the third phase of the three-drive pattern. There are also signs that it has completed the Elliot corrective wave, meaning it could rocket to its all-time high this week.
