The Crypto Fear & Greed Index, which measures the emotional pulse of the cryptocurrency market, has fallen to its lowest point since Donald Trump’s presidential election victory last month.

On Monday, the index reached 70, matching the level before Trump's decisive victory. He won several swing states, while the Republican Party also gained control of the Senate.

This index has a scale from 0, indicating extreme fear, to 100, indicating extreme greed. It helps traders and investors assess whether the market is driven by fear or greed, guiding their buying and selling decisions.

Bitcoin Sentiment Cools as Fear and Greed Index Drops from Post-Trump High

In the days following Trump's election, the index soared to 94, indicating that market greed had reached a peak and valuations were likely excessive. This high was even achieved before Bitcoin recorded its all-time high on December 17.

Currently, the index has dropped to 70, still reflecting a market driven by greed, with investors remaining overconfident but less intense. This change also indicates a slight increase in risk awareness among some investors. At 90, greed typically drives unchecked profit chasing, while at 70, investors begin to heed warnings of potential corrections or bubbles.

Currently, Bitcoin is trading around $95,488 and has dropped more than 8% in the past week. The price of this asset often reflects investor sentiment, rising quickly when greed drives profit expectations and falling sharply when fear drives sell-offs.

Is There No Clear Pattern for Bitcoin During the Holiday Season?

James Toledano, COO at Unity Wallet, offered advice on Bitcoin's behavior during the holiday season. He drew a parallel between Bitcoin's volatility and the constant moisture of water, stating that just like water is always wet, Bitcoin is always volatile.

"Its behavior is always mixed and there is no clear pattern at the end of the year and into the next year," he said. "Sometimes prices rise in the new year and sometimes they fall. So, historically, we can say that Bitcoin often exhibits mixed behavior around Christmas and New Year’s."

He clarified that while lower liquidity may amplify volatility, the lack of significant institutional participation, on the contrary, could stabilize prices. However, exceptions occur in years when macroeconomic news or market catalysts trigger sudden changes.

"This year, much depends on investor sentiment after the approval of the 2024 ETF and the Trump factor as well as other macro trends. A relatively quiet phase is possible unless unexpected news triggers volatility. But considering that on January 20, Trump supporting Bitcoin will return to the White House, I think we can expect prices to have more volatility soon," he added.

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