From Fear to Confidence: Crypto Fear and Greed Index Reflects Market Shift Post-Fed

Alternative’s Crypto Fear and Greed Index, which is closely followed by investors, has moved into a neutral stance. The index follows such indicators as market momentum, volatility, Bitcoin dominance, and social sentiment. That is a neutral reading because it shows that investors are now even-keel in their emotions neither too greedy nor too fearful. That change in sentiment comes after positive reactions to the Federal Reserve’s March 19 action to leave interest rates steady at 4.25% and 4.50%, continuing its pause on rate cuts in the presence of ongoing economic uncertainty.

Fed’s Stance Brings Cautious Optimism

Fed Chairman Jerome Powell’s statement injected a touch of caution into the overall market euphoria. Despite inflation being stubbornly high, Powell admitted that Trump’s tariffs would complicate the battle against runaway prices. 

Although the Fed’s dot plot still projects two rate cuts in 2025, Powell admitted the challenge of assessing the full impact tariffs may have on inflation. Adding to this cautious outlook, the central bank revised its GDP growth projection down to 1.7% from the previous estimate of 2.1% in December.

Despite these warnings, markets responded positively. The S&P 500, Nasdaq, and Dow Jones all closed over 1% higher following the announcement. Crypto markets also experienced strong gains, reflecting growing investor confidence in the digital asset space.

Bitcoin, Ethereum, and Solana Rally Strong

Bitcoin has surged 3%, now standing at $85k after briefly reaching its highest level since March 9 at $87,431. Ethereum also saw gains, rising by 4% to reach $2,022. Meanwhile, Solana led the rally with a 6% jump, pushing its price up to $134.The total crypto market capitalization is now at $2.81 trillion, marking a 3.56% increase in value within the last 24 hours.

Futures markets reacted in a similar aggressive manner, $355 million worth of contracts were closed out from the last 24 hours, and $258 million of them were short liquidations. This large-scale liquidation indicates that traders betting against the market were caught off guard by the bullish momentum.

Institutional Interest on the Rise

Adding to the positive sentiment are two key developments. First, expectations are building around the launch of Solana exchange-traded funds (ETFs), scheduled for Thursday, March 20. This launch could mark a significant milestone for Solana, signaling increased institutional acceptance.

Second, after five consecutive weeks of withdrawals, Bitcoin ETFs have reversed course. According to SoSoValue data, Bitcoin ETFs recorded weekly inflows of $483 million, pointing toward renewed interest in crypto investment products.

While the Fed’s resolute stance is reassuring in the short term, Powell’s mention of moderation in consumer spending is a point of unease. Investors continue to be keenly interested in inflationary trends and the potential effect of tariffs as they drive in a market of opportunity and uncertainty. However, the mix of rising institutional interest and market sentiment can potentially foretell enhanced trends for the crypto industry in the coming days.