The crypto market experienced a significant shift as Bitcoin’s price dipped below $92,000 on January 9, leading to a decline in the Crypto Fear & Greed Index. This essential measure of market sentiment plummeted by 19 points to its lowest level since October 14, falling to a score of 50 out of 100. This marks one of the index’s most substantial daily drops in recent years, moving into the “Neutral” zone after months of maintaining a “Greed” or “Extreme Greed” position.
The downturn coincides with reports that the U.S. Department of Justice received clearance to sell $6.5 billion worth of Bitcoin, seized from Silk Road, although no sales have occurred yet. Additionally, market analysts attribute the declining sentiment to anticipation that the U.S. Federal Reserve may tighten monetary policy in 2025, potentially impacting Bitcoin and the broader crypto sector. A rising U.S. dollar and treasury yields have further complicated Bitcoin’s ability to remain above the $100,000 mark in recent weeks.
Concurrently, U.S. spot Bitcoin exchange-traded funds noted their second-largest outflow, with nearly $570 million pulled out on January 8. This movement suggests a potential further retreat for Bitcoin, as explained by 10x Research’s founder, Markus Thielen. The index had peaked at 94 out of 100 last November, driven by positive market responses to Donald Trump’s presidential election victory and the speculation surrounding a strategic U.S. Bitcoin reserve in 2025.
