The Crypto Fear and Greed Index, a key indicator of market sentiment in the digital asset space, has dropped to its lowest level since former President Donald Trump’s election victory last month.
Fear and Greed Index Drops
The index, which tracks crypto investors’ sentiment, dropped from “extreme greed” to 70 on Monday, indicating a shift to more cautious optimism, though it still reflects a generally positive outlook.
The index hit 94 after Trump’s election, reflecting heightened optimism that his administration would be favorable to cryptocurrencies. President-elect has driven Bitcoin to record highs on December 17 with his plans to create a US Bitcoin strategic reserve.
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Since then, the index has fallen to 70, signaling a shift to more cautious sentiment as investors weigh concerns over potential market corrections, despite Trump’s return to the White House and continued support for crypto.
Bitcoin Price Declined
Bitcoin peaked at over $108K earlier this month and is now down more than 8.5% in the past week, trading around $95,700 as of the time of writing.
Bitcoin’s price dropped on Wednesday after Federal Reserve Chairman Jerome Powell signaled a more cautious stance on the interest rate cuts in 2025.
Despite the recent dip, many investors remain cautiously optimistic about the future of digital assets, particularly in light of the upcoming administration’s pro-crypto stance.
Trump’s return to the White House on January 20 could once again reignite volatility in the market as his policies on Bitcoin and blockchain technology begin to take shape.
Trump Announced New Appointments
The index’s drop comes as Trump makes significant moves to shape his administration’s economic policy, particularly with respect to digital assets.
On December 22, Donald Trump appointed Stephen Miran, a former Treasury official, to lead the Council of Economic Advisers. Miran will play a pivotal role in advising Trump on economic policy, including potential regulations for the cryptocurrency industry.
Trump’s crypto influence was further solidified with the appointment of Bo Hines, a former Yale football player, to head the newly established Crypto Council.
As the executive director of the Presidential Council of Advisers for Digital Assets, Hines will work with industry leaders to foster growth and innovation in the crypto sector.
In his December 22 announcement on Truth Social, Trump emphasized the importance of the crypto space in the nation’s technological future, stating, “Together, they will create an environment where this industry can flourish, and remain a cornerstone of our Nation’s technological advancement.”
On The Flipside
- Social sentiment around Bitcoin has reached its lowest level of 2024, potentially indicating an upcoming rebound above the $100,000 mark.
- Last week, Trump confirmed his intention to create a US Bitcoin reserve.
Why This Matters
The drop in the Crypto Fear and Greed Index reflects growing caution among investors, signaling potential volatility in the market. With Trump’s return to the White House and his continued pro-crypto stance, the market could see a shift in sentiment, potentially sparking renewed activity and price movement in the coming months.
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