Bitcoin Greed Index Dips to 'Neutral' Despite Spot Bitcoin ETF Approval

In a surprising turn of events, the Crypto Fear and Greed Index has plummeted to "neutral" levels, marking a shift from the recent "extreme greed" score just days after the historic approval of spot Bitcoin ETFs in the United States.

Neutral Sentiment:

The Crypto Fear and Greed Index registers a score of 52 out of 100, hitting "neutral" levels for Bitcoin's market sentiment. This is the lowest score since October 2023.

The Crypto Fear and Greed Index has fallen to its lowest point in three months. Source: Alternative.me

Post-ETF Approval Dip:

Despite the anticipation and subsequent approval of spot Bitcoin ETFs, the index's decline suggests a shift in market sentiment within a week.

Index Components:

The Crypto Fear and Greed Index considers six key performance indicators, including volatility (25%), market momentum and volume (25%), social media (15%), surveys (15%), Bitcoin’s dominance (10%), and trends (10%).

The Crypto Fear and Greed Index has fallen to its lowest point in three months. Source: Alternative.me

Bitcoin Price Movement:

Bitcoin experienced a surge to $49,000 in the 24 hours following the SEC's approval of spot Bitcoin ETFs. However, by January 12, it retraced to $41,500 as traders secured profits.

Current Bitcoin Price:

At the time of publication, Bitcoin is trading at approximately $42,200, having stabilized after the price fluctuations post-ETF approval.

Uncertainty Around ETFs:

Despite the ETF approval, uncertainty lingers around spot Bitcoin ETFs, with conflicting data on their performance and a lack of detailed information about these new investment vehicles.

Searches for Meaning:

Market participants, witnessing Bitcoin's recent price actions, have seen a surge of 1,100% in searches for "Why is Bitcoin dropping?" on Google Trends, reflecting a quest for understanding amid the market uncertainty.

The decline in the Crypto Fear and Greed Index, despite the approval of spot Bitcoin ETFs, suggests a nuanced market sentiment. Bitcoin's price fluctuations post-approval and the subsequent stabilization, coupled with increased searches for explanations, highlight the ongoing uncertainty surrounding the impact of ETFs on the cryptocurrency market.