QCP Insights: Bitcoin Back Above $85K as Fear and Greed Index Spikes to 45%

Bitcoin and Ethereum rallied strongly over the weekend, with Bitcoin surpassing $85,000 and Ethereum hitting $2,000. The rally was fueled by strong inflows into ETFs and improving market sentiment. However, concerns about macroeconomic risks, including upcoming tariff escalations, remain a potential risk that could challenge the sustainability of the rally.

Crypto Markets Recover on Bitcoin ETF Demand, but Risks Remain

According to a QCP Insights market report on March 24, the rally was fueled by Bitcoin spot ETF inflows, after ETFs saw a net inflow of 8,775 BTC, or about $744 million. This comes after weeks of outflows, suggesting liquidity is returning to crypto. Notably, the rally appears to be driven primarily by genuine spot demand rather than excessive leverage.

The crypto market’s Fear and Greed Index has also increased, from 32% to 45% over the past week, approaching neutral territory. In parallel, options market data suggests a neutral stance with declining implied volatility and flat risk reversals.

Macroeconomic risks could slow the rally

While the current rally looks positive, the market still faces uncertainty. April 2 is when tariffs are likely to escalate, which could weigh on risk assets and put the rally at risk of a reversal. Traders are also wary that this rally could be short-lived, similar to last week’s rally, which quickly retreated within 48 hours.

Cryptocurrency investors are still closely watching for signs that the current rally can be sustained, or if another correction is on the horizon.