A crypto market sentiment index has risen to its highest level in over three months on Wednesday after Bitcoin rallied nearly 6% to within striking distance of $80,000.
The Alternative.me Crypto Fear & Greed Index rose 14 points to 46 out of 100, its highest level since Jan. 18 and its largest single-day gain in more than three months.
While still in the โFearโ zone, the current reading marks a sharp rebound from the all-time low of 5 recorded on Feb. 23 after the Trump administration imposed a 15% global tariff, sending Bitcoin (BTC) down to about $63,000.
The crypto sentiment index has been stuck in the Fear zone since Jan. 18. This has come despite continued institutional crypto adoption on Wall Street and a crypto-friendly regulatory agenda in Washington.ย
However, Bitwise chief investment officer Matt Hougan and others have noted that retail traders havenโt shown up in the same numbers as previous market cycles.ย
The Crypto Fear & Greed Index score incorporates metrics such as social media posts and Google search volume related to crypto, which are mostly retail-driven metrics.ย
Bitcoin rose 5.9% to nearly $79,400 over a 20-hour period on Wednesday but has since cooled to $77,920, according to CoinGecko data.
Perps market has fueled Bitcoin rally: CryptoQuant
In a post to X on Wednesday, CryptoQuantโs head of research, Julio Moreno, said Bitcoinโs rally was โcompletely driven by demandโ in the perpetual futures market.
However, he noted that spot demand has been contracting, albeit at a slow pace, and warned that a market correction could arise if traders start taking profits as spot demand continues to contract.
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In a separate X post, CryptoQuant noted that over 300,000 Bitcoin have moved into long-term holder wallets over the last 30 days, while shorter-term holders have offloaded the cryptocurrency.
โBitcoin supply is moving into stronger hands,โ CryptoQuant said, noting that Strategy has scooped up 53,000 Bitcoin alone in the last month.
Bitcoinโs rise toward $80,000 has come despite continued uncertainty in the Middle East, with the US and Iran struggling to reach a resolution over management of the Strait of Hormuz.
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