Crypto sentiment deteriorated sharply Tuesday as Bitcoin fell below $106,000, triggering one of the steepest drops in the Crypto Fear & Greed Index this year. The index slid to 21 — deep in “Extreme Fear” territory — marking its lowest level in nearly seven months. BTC briefly touched $105,540 before rebounding above $106,500, still down about 2% on the day.
Market analysts attribute the weakness to declining institutional participation, slower on-chain activity and renewed concerns over U.S. monetary policy. Although the Federal Reserve cut rates for the second time this year, it indicated no additional cuts are likely in 2025, disappointing investors who expected further easing.
The index has swung between fear and neutral levels since Bitcoin cooled from its early-October peak above $126,000. Tuesday’s sentiment levels echo past fear phases triggered by macro uncertainty and sudden price drops, suggesting continued volatility ahead as investors reassess risk appetite.
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