The index measuring investor sentiment in the cryptocurrency market has plunged from “neutral” to “fear” in just one month. As of 8 a.m. on Nov. 11, CoinMarketCap's CMC Crypto Fear & Greed Index stood at 26, down 31 points from 57 last month. The index had also fallen from 29 the previous day and 35 a week earlier, underscoring the rapid deterioration in market sentiment. The decline is widely attributed to persistent inflationary pressures in the United States and growing concerns over further interest rate hikes by the Federal Reserve (Fed).
Bitcoin was trading at $73,637, down 2.05% from 24 hours earlier, while its price on South Korean exchange Bithumb hovered around 100 million won. The cryptocurrency had also fallen 5.39% over the past week. Ethereum, the second-largest cryptocurrency by market capitalization, dropped 4.1% to $2,046, while major altcoins also posted broad declines, with Solana falling 4.54%, XRP dropping 4.28% and Hyperliquid losing 4.39%.
The main factor weighing on the market was the October Consumer Price Index (CPI), released on Nov. 10 (local time). According to the U.S. Department of Labor, the CPI rose 0.4% from the previous month, while core CPI, which excludes volatile food and energy prices, increased 0.3%. Both figures exceeded market expectations of 0.3% and 0.2%, respectively. With inflation proving more persistent than anticipated, concerns are mounting that the Fed could raise interest rates again in December.
Hawkish remarks from key Fed officials further fueled market anxiety. Fed Governor Christopher Waller said he supported a 25-basis-point rate hike in December even if inflation continued to moderate. He also said the Fed should consider a 50-basis-point increase if October's core CPI came in at around 0.3% or higher from the previous month. Dallas Fed President Lorie Logan also indicated that at least two additional rate hikes would be necessary. The Fed raised its benchmark interest rate by 25 basis points in September before holding it steady in October.
Institutional investors, which had previously provided support for the market, have also begun pulling back. U.S. spot Bitcoin exchange-traded funds (ETFs) recorded net outflows of $201.08 million on Nov. 9 (local time), marking their third consecutive day of withdrawals. BlackRock's IBIT alone saw $213.23 million in outflows, highlighting weakening demand through ETFs. The net assets of U.S. spot Bitcoin ETFs stood at $94.43 billion, equivalent to 6.27% of Bitcoin's total market capitalization. ETFs have served as a key channel for institutional investment in the cryptocurrency market, helping support prices.
Regulatory uncertainty stemming from changes in the U.S. political landscape has also emerged as a headwind. With Democrats securing majorities in both the House and Senate in the U.S. midterm elections, concerns have grown that oversight of the cryptocurrency industry could tighten. Expectations that the previously industry-friendly policy stance could shift are prompting investors to reassess their exposure.
The bond market is also creating an unfavorable environment for cryptocurrencies. The yield on the U.S. 10-year Treasury note climbed as high as 4.996%, approaching the 5% threshold and boosting the appeal of safe-haven assets. In contrast, Bitcoin, which does not generate interest income, has become relatively less attractive. Some market analysts warn that Bitcoin could fall further below $73,000 if Treasury yields break above the 5% level.
