Crypto Fear & Greed Index Remains in Greed Zone Amid Israel-Iran Tensions

Despite rising geopolitical tensions due to airstrikes between Israel and Iran, the Crypto Fear & Greed Index remains in the ‘greed’ zone at a score of 60. Bitcoin, while seeing a 2.8% dip, maintains investor confidence above $100,000, with ETFs showing strong inflows. In contrast, Ether faced outflows, ending a 19-day streak. The recent market reaction is less severe compared to a similar incident from April 2024.

The Crypto Fear & Greed Index, which gauges the general sentiment within the cryptocurrency market, remains firmly in the “greed” zone. This follows the heightened geopolitical tensions after Israel executed a series of airstrikes on Iran, with the Index reporting a score of 60 on Sunday. Interestingly, this is occurring even as Bitcoin (BTC) saw a slip of 2.8%, settling at $103,000 on Friday, coinciding with reports of explosions in Tehran at 22:50 UTC Thursday, for which Israel took responsibility.

In response, Iran reportedly fired back with “dozens of ballistic missiles” on Friday night, stirring up fears among investors. The Index was at 71 just a day earlier, yet Bitcoin’s price movement doesn’t seem to have been overly impacted by these escalating tensions. Bitcoin was on the verge of testing its all-time peak of $111,970 from May 22, trading at $105,670 at the time of writing, per CoinMarketCap data.

Ether (ETH) felt the heat as well, experiencing a significant drop of 10.79% during the same timeframe. It hit a low of $2,454 before bouncing back to $2,534, which suggests some resilience in the market. Analysts are noting that despite international turmoil, Bitcoin appears to be holding its ground. A crypto expert known as Za pointed out in a post on X, “Bitcoin does not seem concerned about the Israel and Iran conflict (yet).”

Za further emphasised that Bitcoin remains a critical indicator in the crypto landscape. Anthony Pompliano, a prominent crypto entrepreneur, echoed these sentiments, asserting that “Bitcoin is relentless.” Traders are displaying a fair amount of confidence, believing that Bitcoin can maintain its position above the psychologically significant level of $100,000, a milestone it reclaimed on May 8 for the first time in three months.

Nevertheless, a drop below that level could jeopardise more than $1.74 billion in long positions, as highlighted by CoinGlass data. In a positive turn for market sentiments, spot Bitcoin exchange-traded funds (ETFs) recorded significant inflows, accumulating $1.37 billion over five days, marking a notable week for Bitcoin products. However, it’s worth noting that spot Ether ETFs saw a contrary trend, ending a 19-day inflow streak with net outflows of $2.1 million.

In terms of historical context, Bitcoin’s reaction to the latest airstrike is noticeably less severe compared to a past incident in April 2024. Back then, during a direct Iranian attack on Israel, Bitcoin’s value plummeted 8.4% overnight following significant tensions. On that particular day, the Index recorded a “Greed” score of 72, which swiftly fell to a “Fear” score of 43 by early May 2024, indicating a more volatile market response to similar geopolitical incidents.