After Bitcoin’s 6% surge to almost $80,000 on Wednesday, the sentiment index for the cryptocurrency market hit its highest point in more than three months. After a 14-point surge, The Alternative.me Crypto Fear & Greed Index is at 46 out of 100, its highest point since January 18th. For over three months, this was the highest one-day gain.
Even if we’re still in the “Fear” zone, this is a huge rebound from the record low of 5 that the index hit on February 23 in the wake of the Trump administration’s 15% global tax, which sent the Bitcoin price down to about $63,000.
All Eyes on Middle East Developments
There has been no movement in the crypto sentiment index from the Fear level since January 18th. This happened even though Wall Street has been actively embracing cryptocurrencies and Washington has a regulatory agenda that is favorable to cryptocurrencies.
The price of Bitcoin jumped 5.9% to $79,400, according to data from CMC. The dominating cryptocurrency has seen remarkable growth despite the breakdown of peace negotiations in the Middle East. On Wednesday, Julio Moreno, chief research officer of CryptoQuant, made the bold assertion in an X post that demand in the perpetual futures market was the only factor propelling the price surge of Bitcoin.
However, as noted by Bitwise chief investment officer Matt Hougan and others, retail traders have not been as active as they were in previous market cycles. A number of retail-driven indicators, including the volume of social media posts and Google searches pertaining to cryptocurrency, make up the Crypto Fear & Greed Index score.
However, he did mention that spot demand has been gradually declining and that traders may experience a market correction if they sell their holdings while demand is still decreasing. Any good news from the continuing peace negotiations in the Middle East is being closely watched by traders, since it has the potential to push Bitcoin’s price even higher than $80,000.