Countless crypto traders woke up to a drastically different market sentiment yesterday. The Fear and Greed Index rocketed 17 points, landing at 49 on March 20, 2025. That’s smack in the “Neutral” zone after weeks of wallowing in “Fear” territory. Not a small jump—it’s the biggest one-day leap we’ve seen in months. Just 24 hours earlier, the index sat at a gloomy 32.
What sparked this sentiment revival? The Federal Reserve‘s decision to keep interest rates unchanged. Plain and simple. The markets let out a collective sigh of relief. Throw in some positive economic data and suddenly inflation doesn’t seem so scary anymore. Funny how quickly sentiment can flip.
Bitcoin responded with enthusiasm, climbing 3% to $85,786. Not to be outdone, Ethereum surged 4% to $2,022, while Solana showed off with a 6% jump to $133. The total crypto market cap swelled by 2% to $2.91 trillion. Short-sellers got hammered, with $355 million in positions liquidated in just 24 hours. Ouch.
The CNN Business-created index, adapted for crypto markets, measures sentiment from 0 (extreme fear) to 100 (extreme greed). It considers factors like volatility, momentum, and even social media buzz. This comprehensive measurement combines five key indicators that provide insight into market psychology. Similar to the traditional markets, the crypto index tracks put and call options to gauge market sentiment. The neutral range typically sits between 45-55, so we’re right where we should be. For now.
History shows these sentiment shifts matter. The index bottomed at 12 during the 2008 financial crisis and plummeted to a mere 2 when COVID hit in March 2020. But it’s also reached highs above 90 after major policy announcements. These extreme readings often signal market turning points.
Don’t get too excited though. The index is backward-looking. It tells you where sentiment’s been, not where it’s going. And it can stay in any zone for weeks. Small-cap cryptocurrencies with market caps under $1 billion tend to experience more dramatic sentiment swings than their larger counterparts. Smart traders use it alongside other tools, not as a crystal ball. Market psychology changes fast in crypto—sometimes overnight. Yesterday proved that perfectly.
