The Crypto Fear & Greed Index has made a significant recovery, climbing from a state of distress to neutral territory at 51 points, marking an end to a two-week bout of fear-driven trading. Bitcoin (BTC), the leading cryptocurrency, witnessed a price surge over the weekend, approaching $115,000 as investor confidence began to return.
In a remarkable single-day boost, the sentiment index surged by 11 points, a sign of growing optimism among traders. This rise of more than 20 points compared to the previous week indicates a noteworthy shift in the underlying market dynamics and trader psychology.
On October 10, a tariff announcement from former President Trump sent shockwaves through the market, causing the index to nosedive from 71 to a yearly low of 24. The fallout resulted in the liquidation of approximately $19 billion in leveraged crypto positions during this tumultuous period.
Recent analytics from Glassnode show a considerable decline in Bitcoin selling pressure, suggesting a possible trend reversal as the negative sentiment appears to have hit exhaustion levels. The initial panic has given way to a more measured market response, signaling that aggressive selling activity is subsiding.
In addition, both spot and futures markets are displaying a flattening Cumulative Volume Delta for the first time since the mid-October sell-off. Glassnode noted, “aggressive selling pressure has subsided over the last several days,” confirming an easing bearish momentum across various Bitcoin trading venues.
Remarkably, short-dated skews illustrate a similar pattern, where sentiment reached extremes of negativity as sell pressure peaked. These sentiment extremes often represent opportune moments for trend reversals, aligning with traders’ desires for favorable entry points.
Funding rates currently sitting below 0.01 percent reflect cautious positioning among traders, with the rates turning negative multiple times over the preceding fortnight. This dynamic suggests that traders are exhibiting restraint rather than engaging in aggressive bullish speculation on Bitcoin’s price.
The market is also watching the upcoming Federal Reserve meeting scheduled for October 29, which could serve as another catalyst for Bitcoin pricing. Data from CME Group’s FedWatch indicates a striking 96.7 percent probability of a quarter-point rate cut, a scenario that typically benefits Bitcoin and the overall cryptocurrency market.
As Bitcoin shakes off the constraints of fear and begins to stabilize, market participants remain hopeful. The combination of recovering sentiment indicators and supportive macroeconomic conditions could herald a new chapter for cryptocurrency valuations moving forward.
