Bitcoin Escapes Fear as Confidence Returns to Crypto
The Crypto Fear & Greed Index has finally emerged from the "fear" zone, settling into a neutral state for the first time in over two weeks. This shift coincides with a surge in Bitcoin's price, which skyrocketed to approximately $115,000 over the weekend.
The index, a gauge of overall market sentiment, now stands at 51 out of 100, marking an 11-point increase from its fearful score of 40 on Saturday. This upward trend is even more pronounced, with a 20-point rise since last week, indicating a significant change in market sentiment over the past few days.
The catalyst for this change was Trump's announcement of China tariffs on October 10, which caused the index to plummet from a "greed" score of 71 to a yearly low of 24. This event led to the liquidation of $19 billion in crypto leveraged positions, intensifying the market's fear.
However, the recent decline in Bitcoin selling pressure, according to Bitcoin analytics platform Glassnode, suggests that the worst of the negative sentiment may be over. Glassnode's analysis indicates that the extreme selling pressure has subsided, with spot and futures CVD (Cumulative Volume Delta) levels stabilizing.
The platform's X post highlights that funding rates have remained below the neutral level of 0.01%, indicating a lack of excessive long positioning or market froth. In fact, funding rates have been consistently negative over the last two weeks, suggesting that market participants are adopting a cautious approach.
Looking ahead, the market is anticipating another interest rate cut by the US Federal Reserve at its October 29 meeting. As of the writing of this article, CME Group's FedWatch data predicts a 96.7% chance of a quarter-point rate reduction this week, adding further fuel to the potential bullish outlook.
