Bitcoin (BTC) Market Sentiment Plunges Into the 'Neutral' Zone After Three Months in the 'Extreme Greed' and 'Greed' Zones

The Crypto Fear & Greed Index — a measure of Bitcoin and the broader crypto market sentiment — fell 19 points in a day to its lowest score since Oct. 14.

The Crypto Fear & Greed Index, which gauges market sentiment toward Bitcoin ( BTC ) and the broader cryptocurrency landscape, has seen a significant drop.

According to data from Alternative.me, the index fell 19 points in a day to reach its lowest score since Oct. 14. The index now stands at 50 out of 100, indicating a shift in market sentiment from “Extreme Greed” to “Neutral.”

Chart showing the change in the Crypto Fear & Greed Index score over the last day. Source: Alternative.me

This development follows a decrease in Bitcoin’s price, with BTC trading below the $92,000 mark on Jan. 9. The drop comes amid reports that the US Department of Justice has been authorized to sell $6.5 billion of the 198,000 Bitcoin seized from Silk Road, although none have been sold yet.

Analysts have also attributed the decline to anticipation of the US Federal Reserve pivoting toward tightening monetary policy in 2025, which could impact Bitcoin and the broader crypto market.

Rising Treasury yields and a strengthening US dollar have also contributed to keeping Bitcoin largely below the $100,000 mark recently.

Meanwhile, US spot Bitcoin exchange-traded funds experienced their second-largest outflow, to the tune of nearly $570 million on Jan. 8. This outflow could signal further retracement in Bitcoin’s price, according to 10x Research founder Markus Thielen.

The Crypto Fear & Greed Index derives a score from several metrics, including market volatility (25%), trading volume (25%), social media sentiment (15%), Bitcoin’s dominance (10%) and trends (10%) to arrive at an overall score.

The index reached a 2024 high of 94 out of 100 on Nov. 22, as the market reacted positively to Republican Donald Trump’s presidential election victory and talks of a strategic US Bitcoin reserve in 2025.

Chart showing the change in the Crypto Fear & Greed Index score over the last 12 months. Source: Alternative.me

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