Bitcoin’s Fear & Greed Index hits 4-year high – Will 2020’s trend repeat?

• BTC’s ‘extreme greed’ hit 2020 highs, which preceded a 50% price pullback. 
• Markets were pricing highly the likelihood of BTC soaring above $100K. 

Bitcoin’s [BTC] $100K target expectation has pushed the market to 2020’s ‘extreme greed’ level, which preceded a 50% price pullback. 

According to CryptoQuant data, BTC’s Fear and Greed Index (FGI) hit a 4.5-year high of 94. 

Source: CryptoQuant

Interestingly, the current trend mirrored the 2020 pattern. The ‘extreme greed’ level of 94 was hit in November 2020.

Three months later (February 2021), BTC declined by 20% and extended its decline to 50% by mid-2021. But before the drawback, it pumped 250% in three months. 

Markets pricing above $100K

It’s also worth noting that after the 250% decline in H1 2021, BTC rallied 120% to hit a cycle top of $69K in H2 2021. 

Perhaps this is why most cycle analysts expect a likely cool-off in early or late 2025. One of them, Alex Kruger, reiterated the same outlook and said, 

“In 2021, the top signals started to roll in February.” 

Will the pattern influence BTC between now and early or late 2025? 

Source: Kalshi

As of the time of writing, prediction markets were pricing BTC soaring above $100K. According to Kalshi, the odds of BTC hitting $100K or $150K by the end of the year stood at 81% and 10%. 

On its part, the asset manager VanEck projected that the cryptocurrency could hit a cycle high of $180K.

The firm cited the pro-BTC regulatory environment and post-2020 election phase of +10% funding rates. Part of its mid-November BTC report read, 

“We anticipate another period of high performance, reminiscent of the post-2020 election phase when sustained 10%+ funding rates drove a 260% gain over 186 days. Our $180k price target remains plausible.” 

However, CryptoQuant’s founder Ki Young Ju projected a conservative cycle high of $141K and a 2024 target of $112K based on the realized cap valuation.

He noted that the market was not yet overheated. In 2020 and 2021, BTC topped after tapping the upper band of the realized cap. 

Source: CryptoQuant

In short, the market expected BTC to soar above $100K, as illustrated by the elevated ‘extreme greed’ level. However, any potential top signal could become evident in early 2025.