Crypto market sentiment has retreated after reaching a multi-month high, as divisions emerge within the U.S. crypto industry over a long-anticipated Senate version of a market structure bill.
The Crypto Fear & Greed Index, which tracks investor sentiment, fell 12 points on Friday to a neutral reading of 49 out of 100, down from 61 on Thursday—a level that signaled “greed.”
Thursday’s score marked the index’s highest level since Oct. 10, when it reached 64. That same day, the crypto market experienced a sharp crash, triggering approximately $19 billion in liquidations.
The index’s multi-month high on Thursday coincided with Bitcoin climbing roughly 5% on the day to $97,870.
Policy concerns temper Bitcoin’s “justified” rally
Crypto analytics firm Santiment said Thursday that Bitcoin’s price increase “appeared more than justified,” citing continued accumulation by smart money alongside selling pressure from retail traders.
However, sentiment across crypto-focused social media began to soften after several industry executives voiced concerns over a Senate version of long-awaited U.S. crypto market structure legislation that was scheduled for markup on Thursday.
The proposed bill outlines how U.S. financial regulators would divide oversight of the crypto sector, but some industry lobbyists objected to certain provisions—particularly one that would further restrict yields on stablecoins.
While many stakeholders were initially prepared to support the legislation, Coinbase CEO Brian Armstrong withdrew his backing, arguing that the bill “would be materially worse than the current status quo.” He added that Coinbase would prefer “no bill than a bad bill.”
Following the backlash, the Senate Banking Committee canceled its planned Thursday markup, saying it needed additional time to secure broader support. The committee did not indicate whether or when the markup would be rescheduled.
The Senate Agriculture Committee also postponed its own Thursday markup of the bill until late January, similarly citing the need to build consensus.
The legislation remains a central topic within the crypto industry, and uncertainty surrounding its progress has the potential to weigh on sentiment as traders anticipate possible price declines.
Still, some market participants view the delays as a positive development. Crypto venture capitalist Kyle Chasse said Friday that the postponements are “a bullish signal.”
“Everyone thought the market was going to get wrecked after the news broke,” Chasse said, noting that it did not and is “actually holding up.”
At the time of publication, Bitcoin was trading at $95,480, down 0.83% over the past 24 hours, according to CoinMarketCap.
