The crypto market has been bullish since early August, led by Bitcoin [BTC]. This recovery follows a bear market that persisted from October last year.
Since the start of August, the total crypto market cap has grown from $2.06 trillion to over $2.91 trillion, adding nearly $1 trillion in six weeks.
This scenario raises the question of whether this increase signals the start of a cryptocurrency bull market.
Market sentiment returns to greed
In essence, the Fear & Greed Index has returned to 59 as of writing, indicating a sentiment of greed. The index was at 45 last week, indicating fear, but that sentiment changed after BTC’s price broke above $85,000.
Notably, the index is not far off from reaching extreme greed levels around 70.
While extreme greed tends to appear near the end of an uptrend, greed also marks the early stages of a bull cycle. The index could remain in this territory until the remaining bears switch sides. This is because there was a bit of profit-taking from Bitcoin holders.
Aside from the market sentiment, there are other factors supporting the potential start of a crypto bull market.
Bitcoin ETF inflows and cost basis
For instance, Spot Bitcoin ETFs saw massive net inflows of $999 million. This became the largest single-day inflow since the 6th of October last year, when the products pulled $1.21 billion in capital.
BTC ETFs from BlackRock, Ark & 21Shares, and Fidelity led with $381.37 million, $289.12 million, and $238.84 million, respectively.
Similarly, Ethereum [ETH] ETFs were pulling capital too. That is, ETH ETFs added another $269.98 million, bringing the daily net inflow from the two to $1.27 billion.
This data shows that the recovery is not limited to Bitcoin, but also includes altcoins. In fact, the rally over the past 24 hours has ignited the full breadth of altcoins, flipping the Bitcoin cycle signal in favor of alts.
Furthermore, Bitcoin has reclaimed all its long-term Moving Averages after spending 300 days below them. Hence, the price remains bullish as per the cost basis.
That is, Bitcoin’s price traded above the True Market Mean at $76,746 and the short-term cost basis at $71,763. Holding above the two key levels would ascertain that the current price could be the start of a bull market.
Winding up, some crypto market participants pointed out that anyone who was looking to short Bitcoin was likely to lose money. Still, traders should be wary of potential reversals since greed usually appears near the end of a move.
Final Summary
- The Fear & Greed Index hit 59, a sharp increase from last week’s reading of 45, indicating a shift in market sentiment.
- Bitcoin ETFs record the largest single-day inflow since last October as technical and on-chain indicators hint at the start of a bull market.
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