- The Crypto Fear & Greed Index is now Neutral at 47 after a week in Fear.
- Bitcoin surged 5.5% in a week to $87,647, driven by institutional inflows and Fed policy signals.
- Analysts suggest the market is in an accumulation phase before a potential breakout.
The crypto market sentiment is improving, with the Crypto Fear & Greed Index moving to “neutral” (47) after spending the past week in “fear” territory.
This shift comes as Bitcoin climbed 5.5% in the past few days, reclaiming the $88K mark. At press time, Bitcoin has settled around $87,647. Experts link this to increased institutional investments and signals from the Federal Reserve about future rate cuts.
Market participants are now actively debating whether this signals the beginning of a renewed bullish phase or simply represents a temporary pause in the market’s characteristic volatility.
Related: Fear and Greed Index at Neutral: What to Expect After 500M USDT Transfer
What Factors Led to the Improved Market Sentiment?
The return of the Fear & Greed Index to a neutral reading signifies a more balanced perspective within the crypto market. This shift follows a significant surge in institutional capital flowing into the sector, with reports indicating that over $500 million has been invested in Bitcoin since the beginning of last week.
The QCP Capital Broadcast highlighted that this sentiment shift aligns with a broader easing of risk aversion in the crypto market. The firm suggested that the sharp reversal of net outflows from Bitcoin ETFs, with 8,775 BTC ($744 million) purchased last week, signaled early signs of liquidity rotating back into crypto. The rebound also coincided with a strong recovery in equity futures.
Despite this positive momentum, QCP Capital is maintaining a degree of caution, observing that activity in the options market currently reflects a neutral “wait-and-see” stance, with implied volumes showing a downward trend and risk reversals remaining flat.
How is the Federal Reserve’s Policy Impacting Crypto?
Last week’s Federal Open Market Committee (FOMC) meeting saw the Fed maintain interest rates at 4.25% to 4.5%. The Fed also announced plans to scale back its quantitative tightening program starting in April, a move that traders interpreted as an indirect form of easing.
QCP Capital believes Fed Chair Jerome Powell’s remarks helped calm investor concerns about a potential recession. Powell acknowledged that outside forecasts had raised the probability of a downturn but maintained that the risk remained moderate.
The firm noted that the Fed’s economic outlook was revised downward, with growth projections cut to 1.7% while inflation expectations rose to 2.8%, raising concerns about stagflation.
Related: How to Trade Crypto During Periods of Extreme Fear and Greed
What Are Analysts’ Takes on This Market Turnaround?
The Fear & Greed Index’s shift to Neutral has sparked mixed reactions, with some seeing it as a buying opportunity and others warning of market fragility.
Crypto Van described this range as “sneaky accumulation” territory, where institutional investors quietly buy in before a larger move. Altucard noted that traders are often hesitant in this zone, neither fearful enough to panic nor confident enough to buy aggressively.
X user Guru compared the market’s current state to a “coiled spring,” predicting that Bitcoin’s next move will likely dictate the direction of altcoins.
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