The crypto market experienced a sudden shift in mood this week as the Crypto Fear & Greed Index plummeted 12 points, moving from “Greed” to “Neutral.” This cooling of sentiment follows a period of intense optimism, triggered largely by internal divisions within the industry over the latest Senate version of a pivotal crypto market structure bill.
On Thursday, the index sat at a multi-month high of 61. However, by Friday, it settled at 49 out of 100. This volatility mirrors the price action of Bitcoin (BTC), which recently surged toward the $98,000 mark before slightly retracing. While market analysts at Santiment noted that the price jump was backed by “smart money” accumulation, the legislative drama in Washington has introduced a fresh layer of uncertainty for retail traders.
Why the Industry is Divided Over the Senate Crypto Bill
The primary catalyst for the sudden drop in sentiment is the friction between crypto leaders and US lawmakers. The proposed legislation aims to clarify which federal agencies—the SEC or the CFTC—have jurisdiction over specific digital assets. While the industry has long asked for regulatory clarity, the specific language in the Senate version has sparked a backlash.
The tension peaked when Coinbase CEO Brian Armstrong publicly withdrew his support for the bill. Armstrong argued that the current proposal is “materially worse than the status quo,” specifically citing restrictive provisions regarding stablecoin yields. His “no bill is better than a bad bill” stance resonated across social media, leading to a quick pivot in market psychology.
Market Reaction: Delayed Markups and Bullish Divergence
In response to the industry pushback and a lack of consensus, both the Senate Banking Committee and the Senate Agriculture Committee canceled their scheduled markups for the bill. The Agriculture Committee has officially pushed its review to late January 2026, leaving the industry in a holding pattern.
Despite the “Neutral” sentiment and the legislative hurdles, some market veterans remain optimistic. Venture capitalist Kyle Chasse suggested that the market’s resilience in the face of this news is actually a bullish signal. Rather than a massive sell-off or “REKT” scenario, Bitcoin has held steady above $95,000, suggesting that the underlying market structure might be stronger than the headlines imply.
As the industry waits for a revised version of the bill in late January, the “Neutral” rating on the Fear & Greed Index suggests that investors are currently in a “wait-and-see” mode, balancing the excitement of recent price gains against the reality of a complex regulatory environment.
