Steady Index, Wild Swings: Crypto Fear & Greed Index Confounds Traders

The Crypto Fear & Greed Index has remained steady at 40 over the last 24 hours, but its movement over the past month reveals a more interesting pattern.

A closer look at the index's history shows that it is capable of extremes, with readings as high as 68 in mid-August last year and as low as 5 in February. This month's run from 28 to neutral 40 may indicate that the index is compressing into a narrow band.

Meanwhile, Bitcoin has seen repeated full cycles this month, including a run towards $66.5K, a slide back near $64K, and another spike past $65K. The crypto market capitalization chart also shows multiple 5-7% swings in both directions inside a single month.

The flat sentiment reading during an active market may be a sign of indifference among traders, who have either grown numb to volatility or are unable to decide which way to lean even as prices go wild. This removes one of the more useful contrarian signals that traders tend to rely on.