Crypto Fear and Greed Index plunges back to neutral levels

The cryptocurrency fear and greed index has returned to neutral after a surge last week.

According to Alternative.me, on Jan. 15, the fear and greed index fell to October 2023 levels. The drop came days after the first spot Bitcoin (BTC) ETFs were approved in the United States.

According to the index, Bitcoin’s market sentiment score is 52 out of a possible 100, the lowest since Oct. 19 last year, when BTC traded at an average daily price of approximately $31,000.

Source: Alternative.meNotably, just a few days ago, the index hit an “extreme greed” reading of 76 as the market awaited the approval of spot Bitcoin ETFs.

The index numerically shows the emotions and sentiments of crypto market participants. It collects and weights data from six key market indicators: volatility (25%), market momentum and volume (25%), activity on social networks (15%), survey data (15%), BTC dominance (10%), and trends (10%).

On the evening of Jan. 10, the U.S. Securities and Exchange Commission (SEC) announced the approval of 11 applications for spot exchange-traded funds based on the first cryptocurrency. Eligible issuers include Bitwise, Grayscale, Hashdex, BlackRock, Valkyrie, BZX, Invesco, VanEck, WisdomTree, Fidelity and Franklin Templeton.

In anticipation of approval in X, a fake SEC message was released stating that the commission had already approved the ETF. The regulator subsequently stated that his account had been compromised, causing the price of Bitcoin to fluctuate wildly.