Data shows the Bitcoin market sentiment has closed in on the neutral territory as the cryptocurrency’s price has recovered to $85,000.

Bitcoin Fear & Greed Index Is Now Close To Neutral Region

The “Fear & Greed Index” refers to an indicator created by Alternative that tells us about the average sentiment present among the investors in the Bitcoin and wider cryptocurrency markets.

To determine this sentiment, the index uses data on five factors: volatility, trading volume, market cap dominance, social media sentiment, and Google Trends.

The metric makes use of a numeric scale running from zero to hundred for representing this estimated mentality. All values above 53 correlate to a sentiment of greed, while those under 47 that to fear. The territory between these cutoffs represents a net-neutral mentality.

Now, here is what the current Bitcoin sentiment is like, according to the Fear & Greed Index:

As is visible above, the Bitcoin Fear & Greed Index has a value of 44 at the moment, which suggests the investors as a whole share a sentiment of fear. This crowd despair is only slightly dominant, though, as the metric is just three units away from the neutral zone.

The same wasn’t the case just yesterday, however, as the indicator held a value of 34, firmly placing it in the fear region. Below is a chart that shows how the index’s value has developed during the past year.

From the chart, it’s apparent that the Bitcoin Fear & Greed Index was around the neutral zone in the final week of March, but the price plunge that came during the last couple of days of the month led to a rapid deterioration of sentiment.

At its lowest, the indicator touched the 26 mark during the plummet. This value was so deep into the fear region that it was on the entryway to a special zone called the extreme fear (25 and under).

Historically, Bitcoin and other digital assets have tended to move in the direction that the crowd least expects. The probability of such a contrary move rises, and the stronger investor sentiment becomes, so extreme fear is where bottoms are likely to take place.

During the recent plunge, the index didn’t enter into this zone, but it did come close, which may be why BTC’s price was able to reach a local bottom. Since the low, the asset has made some recovery and has now broken past $85,000.

With investor sentiment no longer being strong in any direction following this recovery, the cryptocurrency might be roughly equally probable to move in either direction.

BTC Price

At the time of writing, Bitcoin is trading at around $85,000, down almost 4% in the last seven days.

Bitcoin Takes a Hit as Trump Unveils Tariff Plans

The cryptocurrency market faced heavy turbulence this week as President Donald Trump announced sweeping tariff policies that rattled both traditional and digital asset markets. Bitcoin (BTC) initially attempted to defend the $83,000 mark but ultimately tumbled, briefly climbing above $88,000 before retreating back to $82,223. The sharp decline came in the wake of Trump’s “Liberation Day” remarks and the unveiling of reciprocal tariffs on global trade partners.

BTC/USD 2-hours chart - TradingView

Market-Wide Liquidations and Crypto Crash

The fallout from Trump’s announcement was immediate: the total market capitalization of cryptocurrencies plunged by over 5%, falling to a low of $2.64 trillion. Bitcoin saw a 2.5% drop, while Ethereum (ETH) and Solana (SOL) suffered steeper losses of 6% and 6.6%, respectively.

Traders in the crypto derivatives markets were hit hard, with $509 million in liquidations, including $176 million in Bitcoin-focused positions. In total, 181,544 traders saw their positions forcibly closed. Traditional markets also felt the impact, with Dow Jones futures plummeting 918 points and the S&P 500 shedding 3.7%, erasing nearly $2 trillion in market value.

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What’s Behind the Sell-Off?

The catalyst for the sell-off was Trump’s aggressive tariff strategy. His administration introduced a 10% baseline tariff on all imports and a 25% tariff on foreign-made cars. Additionally, reciprocal tariffs, which are set to take effect on April 9, will impose up to 54% tariffs on certain nations, including China.

These protectionist policies created uncertainty across financial markets, prompting investors to move toward safer assets. While Bitcoin often behaves as a hedge against economic instability, its recent price action suggests that investors are currently favoring traditional safe havens like gold, which surged from $3,134 to $3,152 per ounce on the same day.

How Will Bitcoin React Moving Forward?

With Bitcoin stabilizing around $82,000-$84,000, analysts remain divided on what’s next. Some believe this is just a short-term correction, while others argue that further downside risk remains if macroeconomic pressures persist.