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ZEC $1,207 Crypto Fear and Greed Index Falls to Pre-Rally August Lows
Bitcoin sentiment has cooled sharply after a summer bear-market end rally, with the Fear and Greed Index dropping to neutral as macro headwinds weigh on crypto.
Key takeaways
- Index hits neutral 56. The Fear and Greed Index dropped to 56 on October 12, down from 82 on August 26.
- ETF outflows total $386.3M. Spot Bitcoin ETFs saw net outflows of $386.3 million for October as of the latest data.
- BTC down 5% weekly. Bitcoin is down close to 5% for the week, trading just above $82,000.
What happened
After a summer rally that ended a brutal bear market for Bitcoin, crypto market sentiment has cooled sharply. The Crypto Fear and Greed Index fell to 56 on October 12, a neutral reading, after hitting an annual peak of 82 in late August. Bitcoin is trading just above $82,000, down close to 5% for the week, after peaking at $86,978 early last week and sliding as low as $81,749.83 on October 8.
Why it matters
The sentiment drop aligns with broader macro headwinds pressuring risk assets. Brent crude topped $101 a barrel last week amid Strait of Hormuz ship attacks, and the 30-year Treasury yield hit 5.70%, its highest since 2002. Higher oil prices fuel inflation concerns, reducing the odds of Federal Reserve rate cuts and making yield-bearing safe assets more attractive than Bitcoin, which offers no yield.
Background
The current sentiment drop follows a 24.9% August Bitcoin rally that led analysts including Fundstrat's Tom Lee and Crypto Quant's Kim Yong Yu to declare the end of the prior bear market. The index had read 68 a month before the October 12 neutral reading, showing how quickly sentiment has shifted in six weeks.
What is still unclear
- It is unclear if Bitcoin's near-term bounce will hold or if the asset will break below $82,000 support to retest the $80,000 low.
Questions readers ask
What is the Crypto Fear and Greed Index?
The Crypto Fear and Greed Index is a 0-to-100 gauge that measures investor appetite for crypto, where 0 represents extreme fear and 100 represents extreme greed.
Why is Bitcoin price falling recently?
Bitcoin has fallen due to macro headwinds including rising oil prices and higher Treasury yields, which reduce appetite for risk assets like crypto.
What is the short-term Bitcoin price outlook for October?
Myriad prediction market traders give Bitcoin a 45% chance of touching $87,500 in October, down from 55% on October 7, with 56% odds of a drop to $80,000.
