- The Crypto Fear and Greed Index jumped to 16 on Thursday.
- This rebound happened as Bitcoin and most altcoins rebounded.
- There is hope that this could be the start of a crypto bull run.
Bitcoin and most altcoins experienced a rebound this week as investors took the opportunity to buy the dip. The Crypto Fear and Greed Index increased to 16, and Bitcoin rose to $68,500 from its low of $63,000 earlier this week. Other leading altcoins, including Polkadot, Aerodrome Finance, Uniswap, Kaspa, Near Protocol, and Ethena, saw their values surge by over 11% in the last 24 hours.
Crypto Fear and Greed Index Has Rebounded
A potential indicator of an emerging crypto bull run is the Fear and Greed Index, which has begun recovering this week. Data from CoinMarketCap shows the index climbing from its year-to-date low of 5 to the current level of 16. Although it remains in the extreme fear zone, there are signs it could rise into the fear range of 20 and above.
The Crypto Fear and Greed Index is a popular industry gauge that analyzes key metrics. Some key metrics include price momentum, which measures the performance of the top 10 coins. It also examines price volatility using the Volmex Implied Volatility Index.
The other key metrics are data from the derivatives market, including put and call option metrics for Bitcoin and Ethereum. Additionally, it examines key searches and mentions on social media, as well as the broader market composition.
The Crypto Fear and Greed Index was inspired by the broader index that was created by CNN Money. It is widely used to gauge market sentiment by examining the most important emotions among traders.
READ MORE: BitMine Stock Price Forms Bullish Pattern Pointing to BMNR Rebound
Is the Crypto Bull Run Starting?
The Fear and Greed Index is one of the most accurate gauges to anticipate a crypto bull run or a bear market. In most cases, this crypto bull run normally starts when the index drops to the extreme fear zone.
As the chart above shows, Bitcoin rebounded earlier this year after the index moved to the extreme fear zone. It also did that in April last year, when it dropped after the Trump tariff announcement.
Conversely, crypto bear markets normally start when the index moves to the extremely greed zone. This view is based on the popular Warren Buffett quote that recommends buying when others are fearful and selling when others are fearful.
Still, there is a major risk that this is not the start of a new crypto bull run. Rather, this could be a dead-cat bounce, a situation in which an asset in freefall rebounds briefly before resuming the downtrend.
One major risk facing the crypto market is that Donald Trump may attack Iran in the coming weeks. Also, there is a risk that top American indices like the Dow Jones and the Nasdaq 100 will slump and form bearish patterns, including rising wedges and bearish divergence.
READ MORE: XRP Price Prediction: Double-Bottom Forms as Key Metrics Jump
