- The cryptocurrency market has experienced a notable surge in the past two weeks.
- The post-election surge has plunged the crypto market into an Extreme Greed situation.
- Analysts predict a potential price correction following the crypto market’s situation.
The cryptocurrency market surged over the past two weeks, led by Bitcoin’s climb to $90,000, marking a record-breaking performance. Speculation suggests the rally was triggered by Donald Trump’s victory in the recent U.S. presidential election. Within a week, Bitcoin, which had been trading below $68,000 till the eve of the elections, soared to a new all-time high of $93,483.
Following Trump’s election win, several cryptocurrencies experienced significant price gains. Ethereum, the second-largest cryptocurrency by market capitalization, gained over 45% during this period, while Solana added 56% to its value during the same period.
The rapid price increases propelled the total cryptocurrency market cap past $3 trillion, approaching the record high of $3.09 trillion achieved during the 2021 bull run.
Read also: How to Trade Crypto During Periods of Extreme Fear and Greed
Fear and Greed Index Signals Extreme Optimism
CoinmarketCap’s data revealed an 83-point rating on the Crypto Fear and Greed Index, indicating a shift toward Extreme Greed in the market.
For context, the Crypto Index is used by crypto investors to monitor the prevailing sentiment and emotional state of the market. This will influence the buying and selling behaviors of traders. If the market rating is closer to 100 on the metric, it suggests an overvalued crypto market, and investors may withdraw from the market, potentially leading to price declines.
According to CoinMarketCap’s data, the highest Fear and Greed Index rating in 2024 was 92. It was recorded during the pre-halving rally, which saw Bitcoin reach its previous all-time high above $73,000. The total crypto market cap rallied above $2.7 trillion then, before retracing to $1.69 trillion.
Despite the elevated Fear and Greed Index, analysts believe the current bull run is still in its early stages. They argue that favorable macroeconomic factors will sustain the momentum, with any pullbacks likely to be brief and limited. The ongoing upside suggests strong potential for the crypto market as it navigates the remainder of the cycle.
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