Crypto Fear & Greed Index Stays Bullish Amid Israel-Iran Tensions Bitcoin Drops 5% Ethereum Falls 10%

The Crypto Fear & Greed Index, a metric that gauges investor sentiment towards cryptocurrencies, has remained in the "greed" territory despite the escalating tensions between Israel and Iran. This index, which ranges from 0 to 100, indicates that investors are still optimistic about the crypto market despite the geopolitical risks. The index has fluctuated between 54 and 61, showing a slight retreat from extreme greed but still reflecting a bullish sentiment overall.

Bitcoin, for instance, experienced a drop from its peak of $110,653 to around $104,700. This decline can be attributed to the flight to safety triggered by the potential military escalation between Iran and Israel. Investors have been reducing their exposure to volatile assets like cryptocurrencies, leading to a broader risk-off mood across global markets. Technical indicators, such as the Relative Strength Index (RSI), have also shown signs of fading bullish momentum, with the RSI dropping to 45.52 after briefly peaking near 60. This aligns with fractal analysis that previously warned of a similar pattern, where Bitcoin failed to reclaim highs and corrected lower.

Ethereum, another major cryptocurrency, saw a steep decline of over 10% following Israeli airstrikes on Iran. The sharp downturn was part of a broader market correction that liquidated over $1.1 billion in crypto positions within 24 hours. The move erased much of Ethereum’s monthly gains and ended its recent uptrend abruptly. From a technical perspective, the ETH/USD chart reflects oversold momentum, with the RSI sitting near 40 and showing limited recovery. The sell-off appears to have stabilized near $2,500, but the RSI suggests bearish pressure persists. Analysts caution that Ethereum’s recovery will depend less on chart patterns and more on macro news in the coming days, particularly around developments in the Middle East and U.S. monetary policy.

Despite the geopolitical risks, the broader crypto market is showing signs of cautious optimism. Easing inflationary pressures and renewed geopolitical stability have helped create a favorable environment for risk assets, including cryptocurrencies. The total crypto market cap remains resilient, with the Fear and Greed Index sitting at a neutral 54, reflecting mixed investor sentiment. While altcoins lag behind, Bitcoin dominance continues amid fiscal concerns and uncertainty about future U.S. monetary policy. As traditional markets falter and inflation cools, crypto assets are increasingly seen as alternative hedges, poised to benefit from any pivot toward looser monetary conditions.

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The regulatory front has also seen significant developments. The U.S. Senate advanced the GENIUS Act, which mandates full dollar backing for stablecoins and introduces strict auditing requirements for issuers with more than $50 billion in circulation. This move clears the way for a final Senate vote and reflects ongoing efforts to regulate the crypto space. Additionally, the U.S. Securities and Exchange Commission (SEC) has intensified scrutiny over staking-based ETF proposals, particularly those involving Ethereum and Solana. The SEC’s recent objections have reignited concerns around regulatory inconsistency, although the agency previously hinted that staking might not qualify as securities activity.

In summary, the Crypto Fear & Greed Index remaining in the "greed" territory amid the Israel-Iran conflict highlights the resilience of investor sentiment in the crypto market. Despite geopolitical risks and regulatory uncertainties, the market continues to show signs of cautious optimism. The recent fluctuations in Bitcoin and Ethereum prices reflect the impact of geopolitical tensions and technical factors, but the overall sentiment remains bullish. As the market matures, investors are increasingly looking at cryptocurrencies as alternative hedges against traditional market risks.