Cryptocurrency market sentiment index falls to October low
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Johny Smith
2025/01/16
3 mins read
Over the past 24 hours, the Bitcoin fear and greed index has dropped by 6 points, settling at 49. The last time the indicator was at a similar level was in October last year, when the main digital coin was trading near the $64,000 area. The current situation indicates that participants trades are more inclined to fear.
This trend emerged immediately after the news that the US Department of Justice received permission to sell 198 thousand bitcoins that were previously seized from the Silk Road marketplace. The situation is also aggravated by the confidence of trading participants that the Federal Reserve will not ease monetary policy at a rapid pace, as previously expected. Moreover, in the context of fighting inflation, the regulator may at some point increase the key refinancing rate, which will become a factor in additional pressure on Bitcoin.
At the same time, US Treasury yields are rising. It is possible that this has somewhat reduced investors’ appetite for high-risk assets, which include digital currencies.
This assumption is also confirmed by the large outflow of funds from spot Bitcoin ETFs that occurred on January 8th. In one day, industry funds lost almost $569 million.
As for the fear and greed index itself, a month ago it was located near the 76 point area, indicating the greed of traders and investors. But despite the current situation, many reputable analysts are positive about the short-term growth prospects of the main digital coin. Many experts suggest that by the end of the 1st quarter of this year, Bitcoin will be able to reach the $150 thousand area. This may be influenced by the favorable policy of the administration of the new US President towards digital assets.
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