The Crypto Fear & Greed Index climbed out of the fear zone on Sunday, reaching neutral territory for the first time since mid-October when President Trump's China tariff announcement triggered a massive market sell-off.
Market sentiment has improved by almost 20 points since last week as Bitcoin surged back toward $115,000 over the weekend. The recovery marks a sharp reversal from the yearly low of 24 that followed Trump's Oct. 10 tariff declaration, which liquidated $19 billion in leveraged positions across the crypto market.
Analysis of Market Dynamics
Glassnode data suggests aggressive Bitcoin selling pressure has subsided significantly in recent days. The analytics platform noted in a Sunday post that spot and futures Cumulative Volume Delta have flattened for the first time since the Oct. 10 crash, indicating reduced selling intensity.
Funding rates remain below the neutral level of 0.01%, showing no excessive long positioning or market froth, according to Glassnode. In fact, funding flipped very negative several times over the past two weeks, demonstrating that participants are approaching the market with caution rather than excessive leverage.
Potential Bullish Catalysts
The shift in sentiment arrives alongside declining Bitcoin selling pressure and potential bullish catalysts on the horizon. Data from CME Group's FedWatch tool indicates a 96.7% probability that the U.S. Federal Reserve will cut interest rates by a quarter percentage point at its Oct. 29 meeting.
Impact of Previous Events
Trump's tariff announcement on Oct. 10 had initially plunged the index from a "greed" score of 71 down to 24. The dramatic decline reflected widespread panic as leveraged traders faced margin calls and forced liquidations across exchanges.
Understanding the Fear & Greed Index
The Fear & Greed Index measures overall cryptocurrency market sentiment through various indicators, including volatility, market momentum, social media activity, and trading volume. The neutral reading suggests investors are neither overly fearful nor excessively greedy at current price levels.
Outlook for Bitcoin Price
Market participants appear to be watching for additional confirmation of the trend reversal before committing significant capital. The combination of stabilizing sentiment, reduced selling pressure, and potential Fed rate cuts could set the stage for further Bitcoin price appreciation in the coming weeks.