The leading cryptocurrency Bitcoin (BTC) is on the rise following Donald Trump’s victory, running from record to record every new day.
At this point, the Bitcoin price continued its record streak in the new week, rising above $82,000 and breaking a new record.
As BTC breaks yet another record, optimism among crypto investors has reached extreme levels.
The Crypto Fear & Greed Index, a key measure of market sentiment, rose to an “Extreme Greed” reading of 76 out of 100 on Sunday.
Analysts said that historical data has shown a steady uptrend in both price and sentiment since 2018, indicating a bullish cryptocurrency market.
However, analysts have noted that while there is usually a strong correlation between price movements and market sentiment, this may not always be true. Accordingly, market volatility and other external factors can cause deviations in sentiment and price.
Speaking to Decrypt, Woo X COO Willy Chuang warned investors about a possible correction, stating that some risks have accumulated in the unstoppable rise of Bitcoin.
“Based solely on data, certain risks have accumulated in the short-term market as BTC prices reach new highs.
Historically, the Fear and Greed Index can reach as high as 90 in extremely bullish market conditions; it is currently at 76 and has entered the risk phase. Because prolonged periods in the Extreme Greed zone (75-100) have historically preceded market corrections. However, it should be noted that the timing and magnitude of these movements are still unpredictable.
“Bitcoin is currently on an upward trend. At this point, a decline to lower prices in the future is inevitable due to the continuous risk oscillation.”
Bitcoin continues to trade at $81,940 at the time of writing.
*This is not investment advice.
