Cryptocurrency market sentiment saw a major decline on Tuesday after Bitcoin briefly fell below $106,000 for the first time in more than three weeks.
The Cryptocurrency Fear and Greed Index on Tuesday fell by half from the previous day to a score of 21 out of 100, indicating “extreme fear” in the cryptocurrency market.
Bitcoin (BTC) fell to a 24-hour low of $105,540 on Monday, retreating from an intraday peak of more than $109,000. It is currently down 2% on the day, recovering over $106,500, per Queen Gekko.
Tuesday’s cryptocurrency sentiment tracking index score is its lowest in nearly seven months, after falling to 18 out of 100 on April 9, as broader stock and cryptocurrency markets fell in reaction to US President Donald Trump’s sweeping global tariffs that took effect that day.
“Extreme fear” appears when Bitcoin declines
The Fear and Greed Cryptocurrency Index last fell to the “extreme fear” level on October 22, reaching a score of 25 out of 100 after Bitcoin fell from over $110,000 to below $108,000.
The index oscillated between “extreme fear” and “neutral,” following the market crash of October 9-10, when Bitcoin quickly slowed from its October 6 peak of over $126,000.
The index was last above a “neutral” score before the early October crash, reaching its highest level over the past month of 74, indicating “greed” on October 5.
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Analysts have attributed the current decline in Bitcoin to declining institutional demand and blockchain activity, as well as concerns about an increasingly hawkish Federal Reserve.
The Federal Reserve cut interest rates for the second time this year on Wednesday, but indicated it may not do so again in 2025, causing cryptocurrency markets to slide as investors hoped for further interest rate cuts.
Last week, bitcoin-linked exchange-traded funds saw net outflows of about $800 million, with institutional buying falling below the daily mined supply for the first time in seven months.
Crypto bulls are hoping for a so-called “Moonvenber,” as Bitcoin has historically gained an average of more than 42% in November, typically the best month for growth.
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