Bitcoin Price Holds Strong Above $90K: Why Greed Sentiment is Fading

Despite Bitcoin’s price maintaining a solid position above $90,000 recently, a curious divergence is emerging in the market. While the asset shows price resilience, the overall crypto sentiment, as measured by key indicators, appears to be cooling off. This creates a fascinating puzzle for investors and analysts alike.

Understanding the Crypto Sentiment Shift

The Crypto Fear & Greed Index is a widely watched tool that gauges overall market sentiment. A score closer to 0 indicates extreme fear, while a score near 100 signifies extreme greed. Here’s what the recent data shows:

On April 23, the index reached a score of 72, placing it firmly in the “Greed” zone, coinciding with Bitcoin crossing back above the $90,000 mark. This was the highest sentiment score in over two months.
However, despite Bitcoin’s price remaining relatively stable, trading between $91,800 and $94,304 over the following days, the sentiment score began to decline.
By April 25, the index had dropped to 60, still in “Greed” territory but significantly lower than its recent peak.

This dip in the Fear & Greed Index suggests that even with a strong Bitcoin price, underlying market confidence or bullish conviction might be weakening.

Why is Sentiment Slipping Despite Bitcoin Price Stability?

Several factors and analyst perspectives contribute to this sentiment shift:

Analyst Caution: Some market observers are expressing doubt about the sustainability of the current rally. Markus Thielen from 10x Research pointed to low activity levels in stablecoin minting as a reason for caution.
Structural Confirmation Needed: Bitfinex analysts noted that while Bitcoin’s recent strength against traditional equities is apparent, it needs further confirmation to be considered a long-term, structural shift.
Altcoin Underperformance: The market remains heavily weighted towards Bitcoin. The CoinMarketCap altcoin season index is very low (17/100), and Bitcoin dominance is high (around 64.39%). This lack of broader market participation might temper overall sentiment.

Conversely, some analysts like Michaël van de Poppe remain bullish, anticipating buyers will step in to push towards new highs.

Positive Signals: Bitcoin ETF Inflows Remain Strong

Despite the cautious crypto sentiment reflected in the Fear & Greed Index and some analyst views, key on-chain and market data provide counterpoints:

Social media sentiment for Bitcoin had reportedly flipped bullish around April 17.
Crucially, US-based spot Bitcoin ETF inflows have been robust. The four trading days leading up to April 24 saw significant net inflows totaling $2.6 billion. This indicates strong institutional and potentially retail demand through regulated products.

These strong Bitcoin ETF inflows represent tangible capital entering the market, providing a fundamental support layer that contrasts with the more speculative or emotional sentiment captured by the Fear & Greed Index.

Market Analysis: Conflicting Signals Abound

The current market environment presents a complex picture. On one hand, Bitcoin’s price is holding strong above a key psychological level ($90K), supported by substantial ETF inflows. On the other hand, broader crypto sentiment, as measured by the Fear & Greed Index, is pulling back, and some analysts remain unconvinced about the rally’s longevity.

This divergence highlights the importance of looking beyond single indicators. While sentiment indexes provide a snapshot of market psychology, they don’t tell the whole story. Hard data like ETF flows and on-chain metrics offer different perspectives on market structure and demand.

In conclusion, while Bitcoin’s price strength is undeniable, the subtle shift in crypto sentiment suggests underlying caution. Investors are navigating a landscape with conflicting signals: robust institutional interest via ETFs versus hesitant broader market psychology and analyst reservations. Monitoring both price action and key indicators remains essential for understanding the market’s next move.