Tension continues to grip markets amid a trade war with an uncertain outcome and a U.S. Fed, led by Jerome Powell, that refuses to yield to Trump’s pressure. It’s a battle on two fronts, gradually spilling into the area that hurts the most: the economy. It’s like watching a slow-motion explosion, with debris accelerating towards us.
U.S. indices have experienced some very dark days, and many indicators have fallen to crisis levels, similar to March 2020 during the COVID disruption or late 2008 during the financial crisis. Yet, monthly index closes show signs of hope, with a recovery that could lay the groundwork for a new bull run.
Despite the prevailing sentiment, sharp investors recognize this environment as an opportunity above all. Bullish signals — though scarce — are emerging from unexpected places. One of them is Bitcoin, which has not only resisted pressure during the worst market days but has also started to form a bottom and is now entering a recovery phase.
Even more importantly, Bitcoin has led the way for the broader market. Of course, systemic risk remains — exponentially heightened by the Trump-Bessent duo's risky bets. It’s as if they attempted to dangle a sword over their adversaries' heads, without realizing it was a double-edged sword slowly starting to bleed them instead.
Speedometers indicating the current state of BTC. The full dot represents the current reading and the white dot represents one week ago.
Sentiment within Bitcoin and the broader crypto ecosystem has caught its first breath of greed after weeks dominated by fear. It’s understandable — the surrounding environment has been complex, volatile, and challenging.
Fear&Greed Index
Naturally, everyone turns bullish when prices rise. A positive sign, however, is that we are not seeing an extreme shift or mindless jumps into euphoria. There's still an underlying fear, and until disruptions from the trade war dissipate and negotiations materialize, that fear and caution will remain.
Sentiment is often capricious and volatile, so a one-sided market reading is dangerous. A more objective and colder lens is market risk itself. The indicator stayed in a high-risk regime since the last week of February, but crucially, it never hit its maximum (100). Instead, after peaking, it consistently registered lower highs.
Bitcoin Risk Index...
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