The cryptocurrency scene continues to be very hot, with Bitcoin hitting new highs one after another. It surpassed $72,700 on Monday. This was initially brought about by the approval of a Spot Bitcoin ETF, which has now been raised ahead of a “halving” event that will limit the amount of new supply circulating from Bitcoin miners.
Bitcoin is up 9.5% over the past seven days and 50% for the month, according to data from CoinMarketCap. The total crypto market capitalization of all tokens rose 10% this week to $2.71 trillion, of which Bitcoin accounted for 52.7%.
Of course, there is no way to know how high Bitcoin will rise in the current bullish frenzy. While many are feeling hopium, there is at least one indicator that thinks we are nearing the top of the high and a price decline will soon follow.
The CoinMarketCap Crypto Fear & Greed Index is in “extreme greed” territory at 89.12 points, up from “neutral” at 59.3 points in early February. The index measures prices and trading data for the largest cryptocurrencies and uses user behavioral data to gauge crypto market sentiment from 0 to 100. An index near zero indicates that investors are “irrationally'' overselling their positions. Compared to when the value is close to 100, the market is more likely to face a correction.
That said, Bitcoin remains a major focus for retail and institutional investors, with $2.6 billion in inflows this week, or funds flowing into the asset, according to CoinShares' Digital Asset Fund Flow Weekly. It is said that $9.9 billion has flown in since the beginning of the year. report. Ether, the second-largest cryptocurrency, isn't directly benefiting from Bitcoin's frenzied hype. Inflows are down $2.1 million last week, but up $135 million since the beginning of the year.
CoinShares Volume 173: Digital Asset Fund Flow Weekly Report
No matter how high investors push Bitcoin ahead of the once-in-four-year Bitcoin halving event, which is expected to occur in mid-April, there is no reason to believe that what goes up won't come down. . Also. In previous cycles, the Bitcoin halving increased the demand and price of the cryptocurrency.
Bitcoin's last halving was on May 11, 2020, and its price rose about 600% from about $9,000 to $63,000 by April 2021. It then fell by around 50% within three months, indicating that the asset's volatility has increased again.