Cryptocurrency Anxiety Surges 17 Points to 49 amid Fed's Rate Hold

The Crypto Fear and Greed Index has experienced a 17-point surge within a day, reaching 49 on Mar. 20, transitioning from the "Fear" to "Neutral" zone.

Alternative's Crypto Fear and Grid index evaluates investor sentiment by analyzing market momentum, volatility, Bitcoin dominance, and social media trends. The transition to neutral sentiment signals a more balanced market perspective, with investors displaying neither extreme fear nor excessive greed.

This shift in sentiment occurred as markets responded favorably to the Federal Reserve's Mar.19 decision to keep interest rates at 4.25%–4.50%, extending its halt on rate cuts due to economic unpredictability.

Fed Chair Jerome Powell recognized that inflation continues to be persistently high and cautioned that Trump’s tariffs could prolong the struggle against escalating prices.

Although the Fed’s dot plot still forecasts two rate cuts in 2025, Powell conceded that it's challenging to estimate the complete impact of tariffs on inflation. The central bank now anticipates 1.7% GDP growth, down from 2.1% in December.

In the wake of the Fed’s announcement, the S&P 500, Nasdaq, and Dow Jones all concluded over 1% higher, while crypto markets exhibited robust gains. Bitcoin (BTC) has increased by 3% to $85,786, briefly touching its highest point since Mar. 9 at $87,431. Ethereum (ETH) is up 4% to $2,022, and Solana (SOL) is up 6% to $133.

The total crypto market cap currently stands at $2.91 trillion, rising 2% in 24 hours. Futures markets experienced a sharp reaction, with $355 million in liquidations over 24 hours, $258 million of which were short positions, according to Coinglass data.

At the same time, anticipation is mounting for the imminent introduction of Solana exchange-traded funds, slated for Thursday, Mar. 20. Meanwhile, following five weeks of withdrawals, Bitcoin ETFs have reversed their course, registering weekly inflows of $483 million, as per SoSoValue data.

The debut of Solana ETFs and the resurgence of demand for Bitcoin investment products both indicate improving sentiment and burgeoning institutional interest in digital assets.

Despite the Fed's steady position, Powell noted that consumer spending, a vital element in economic growth, is starting to decelerate. Investors are closely monitoring inflation trends and potential tariff consequences as the market negotiates a turbulent climate due to the ambiguity surrounding monetary policy.