Crypto Fear and Greed Index hits 62 after $1.44B in shorts are wiped out

Crypto traders have gone from fearful to greedy remarkably quickly, where just one day earlier, the index stood at 46, firmly in “Fear.”

The Crypto Fear and Greed Index jumped to 62 on August 20, up 16 points in a single day, as Bitcoin’s surge beyond $72,000 was accompanied by the shift that came after a rally that caught traders betting on another decline off guard.

Fear disappears as Bitcoin pushes above $72K

The change looks even sharper over a longer period.

Last week, the index was down at 29, but one month ago, it was at 25, putting the market in “Extreme Fear.”

Just the same way the index has moved dramatically, recently, so has the Bitcoin price.

The $BTC price was around $72,465 at the time of writing and briefly reached $72,868. But the rally began with Bitcoin below $65,000 on August 19 before other assets followed its lead.

Ethereum and other major altcoins saw an increase in price, just as $BTC did, and crypto-related stocks also saw positive moves.

On the same day these assets were seeing major price moves, President Donald Trump renewed his push for Congress to pass the CLARITY Act, keeping crypto policy in focus in Washington, but neither development alone establishes why Bitcoin rallied so sharply.

$1.44B bet on falling prices goes wrong

Many traders had placed bets on crypto prices to keep falling, but instead, the market suddenly went the other way.

AMBCrypto reported $1.61 billion in liquidations over 24 hours on August 19, and about $1.44 billion was from traders betting on lower prices.

Bitcoin saw $861.06 million of those short losses, while Ethereum was responsible for another $424.21 million.

The scale of those losses helps explain why sentiment changed so quickly, but still, a Fear and Greed reading of 62 does not mean price will continue going higher.

Final Summary

• The Crypto Fear and Greed Index moved by 16 points to 62 as Bitcoin moved above $72,000.
• Traders betting on prices of crypto falling lost about $1.44 billion during the previous day’s rally.

Source: cryptonews.net