According to Coinglass data, the Bitcoin Fear and Greed Index, which measures the sentiment of the Bitcoin and overall cryptocurrency market, dropped from 69 on Thursday to 50 on Friday, the lowest score since October 14th of last year.
The Fear and Greed Index fluctuated between “Fear” and “Neutral” territory in early October when the price of Bitcoin was around $60,000 to $63,000. After October 15th, as Bitcoin continued to rise and broke the $100,000 mark, the Fear and Greed Index hovered in the “Extreme Greed” and “Greed” territory for nearly three months until today when it dropped back to the “Neutral” zone.
Source: Coinglass
The cooling market sentiment occurred as Bitcoin fell below $92,000 yesterday. There were reports earlier that the US Department of Justice had obtained approval to sell the $6.5 billion worth of Bitcoin seized from the Silk Road, although the institution has not sold any Bitcoin so far. Some analysts also attribute the recent market downturn to expectations of the Federal Reserve tightening its monetary policy in 2025, which would affect the Bitcoin and overall cryptocurrency market.
The values of the cryptocurrency Fear and Greed Index are calculated based on market volatility (25%), trading volume (25%), social media sentiment (15%), Bitcoin dominance index (10%), and trends (10%). The index reached a score of 94 (out of 100) on November 22nd last year, when the market reacted positively to speculations about Trump winning the presidential election and the possibility of the US establishing a strategic Bitcoin reserve in 2025. Data source