Crypto market optimism has cooled after reaching a multi-month peak, as uncertainty surrounding a proposed US crypto market structure bill unsettles investors. While prices remain relatively resilient, sentiment indicators suggest growing caution across the digital asset space.
Crypto Fear & Greed Index Drops to Neutral
The widely followed Crypto Fear & Greed Index fell by 12 points to 49, shifting sentiment from “greed” back to neutral. Just a day earlier, the index stood at 61, its highest level since early October, reflecting strong bullish momentum. The recent pullback highlights how quickly confidence can change when regulatory risks resurface.
The earlier spike in sentiment coincided with Bitcoin gaining roughly 5% in a single day, briefly pushing prices close to the $98,000 level. Analysts noted that the rally was supported by institutional accumulation, even as retail traders reduced exposure.
Regulatory Concerns Weigh on Confidence
Sentiment weakened after prominent industry figures raised concerns over a Senate proposal aimed at defining US crypto market oversight. The bill outlines how regulators would divide authority over digital assets, but contentious provisions particularly those affecting stablecoin yield restrictions — triggered backlash from parts of the industry.
Santiment said on Thursday;
As criticism intensified, lawmakers postponed planned committee markups, signaling that consensus has yet to be reached. For markets, the delay introduced policy uncertainty, often a trigger for short-term sentiment declines.
Despite the dip in sentiment, prices have not seen a sharp selloff. Some investors view the legislative delay as constructive rather than negative, arguing that revising the bill may lead to clearer, more favorable rules.With Bitcoin trading slightly lower on the day, traders remain watchful, balancing strong price structure against unresolved regulatory questions that continue to influence market psychology.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.