Investor sentiment in the crypto market in the past two months has been well within fear territory, with the Fear and Greed Index plunging to 16, just six pointsInvestor sentiment in the crypto market in the past two months has been well within fear territory, with the Fear and Greed Index plunging to 16, just six points

BTC, ETH, XRP linger below all-time highs as markets trade with fear sentiment

2025/12/15 21:45

Investor sentiment in the crypto market in the past two months has been well within fear territory, with the Fear and Greed Index plunging to 16, just six points above 2025’s low of 10 reached in November. Over the past year, readings of fear or extreme fear have accounted for more than 30% of the index’s assessments.

Bitcoin (BTC), the crypto market’s bellwether, has struggled to regain footing after a volatile autumn that took it to as low as $80,000. As of this reporting, the king coin is trading near $88,900, 30% below its all-time high of $126,000 set in October. 

Second in line, Ethereum is also 36% down from its August $4,946 high, while Ripple’s token XRP has given away over 40% of its value back to the loss category, in a winter that may not turn sunny before 2025 closes its curtains. 

The market has yet to stage a meaningful recovery following a liquidation crash that sent Bitcoin down 36% from its peak more than two months ago, nailing down the sentiment index firmly within the extreme fear territory.

Market sentiment in fear, even for US equities

The cautious mood in crypto is not far off from the trend witnessed in US equities, as the CNN Fear and Greed Index for stocks currently reads 42, despite the S&P 500 trading at 6,827, just a few percentage points below its record high. In both cryptocurrencies and traditional equities, investor psychology is clearly dominated by risk aversion. 

The macroeconomic factors exerting downward pressure on risk assets include a market watch on the Bank of Japan (BoJ), expected to raise interest rates by 25 basis points to 0.75% on December 19, the highest level in three decades. When the BoJ made a rate raise in July 2024, Bitcoin dropped from $65,000 to $50,000.

Moreover, speculation around global liquidity and rising US yields had already pushed Bitcoin below $84,000 within the first week of the month. According to several economists, elevated US yields and tighter liquidity conditions are an eye-burning sight for the crypto market and Bitcoin’s short-term outlook.

That said, in the midst of all the bearish signs, several developments have made crypto market bulls optimistic for the weeks ahead. The Federal Reserve concluded its quantitative tightening (QT) program on December 1, injecting $13.5 billion into the market and projecting up to $40 billion in additional liquidity. 

Since then, institutional adoption for digital currencies seems to have shaken off the despair of November’s redemptions, with Vanguard launching cryptocurrency ETFs and Bank of America approving allocations of up to 4% in Bitcoin for its clients.

Technical indicators like options call targets ranging from $100,000 to $115,000 and support levels around $86,000 have reignited the positive predictions. Traders are positioning for accumulation between $80,000 and $85,000 if Bitcoin takes a deeper slump, two of its immediate support levels. 

CryptoQuant contributor GugaOnChain summed up the sentiment saying: “Between BoJ risks and Fed stimulus, BTC faces tension between a drop to $70,000 and a rally toward $180,000. The balance will depend on global liquidity and institutional confidence.”

Ripple ETFs record inflows continue, price tanks 5.2% in the week

Ripple (XRP) has experienced a week of choppy trading in which it began at the $2.1 price level, went up to as high as $2.15 around December 10, before correcting to $1.99 during Monday’s early US trading sessions. 

According to data from CryptoQuant, there was a substantial reduction in exchange reserves in November from over 3.5 billion XRP to around 1.5 billion. In early December, market watchers reported an additional 1 billion XRP withdrawn within three weeks, supposedly caused by whale activity and US spot XRP ETF launches.

The spot XRP ETFs have recorded their 19th consecutive day of inflows, accumulating over $20.1 million on Friday alone. According to SoSoValue data, cumulative inflows now approach $990.91 million. 

However, since the October 10 liquidation crash, bearish sentiment has wiped out over 28.9% from XRP, which means the token is suffering from the event’s causality, much like the rest of the market.

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