Crypto Market Shakes Off 'Extreme Fear' as Trump's Trade Deal Offers Temporary Reprieve

The cryptocurrency market is showing early signs of a tenuous recovery as the highly volatile “Extreme Fear” sentiment begins to subside, a direct response to geopolitical developments. The latest news regarding a potential trade deal announcement from U.S. President Donald Trump has injected a cautious sense of optimism, though the overall market remains in a state of elevated anxiety.

Easing of ‘Extreme Fear’ in Crypto

The widely-followed Crypto Fear & Greed Index experienced a critical shift, moving out of the deepest “Extreme Fear” territory. This follows a period of intense pressure triggered by global macro events and a massive liquidation cascade that wiped out billions in leveraged positions across the market. The index, which quantifies overall market emotion, shows that the immediate panic among investors is easing, yet the underlying current remains firmly in the “Fear” zone.

The Trump Trade Deal Effect on Digital Assets

The primary catalyst for this sentiment uplift was President Trump’s recent remarks suggesting a significant trade agreement was imminent. For a market hypersensitive to global economic stability, the anticipation of easing trade tensions, particularly between the U.S. and China, has provided a temporary cushion.

Historically, the crypto sector has shown a strong, volatile correlation with global politics and trade negotiations, as noted by one industry commentator: “The crypto market is clearly still grappling with geopolitical headline risk, showing its vulnerability to sudden macro developments.”

Bitcoin and Ethereum Price Action

In the wake of the trade deal news, major cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), saw their prices stabilize, though a significant bullish breakout has yet to materialize. While the sentiment shift suggests that the recent market bottom may be in, analysts advise caution. Long-term investors are primarily looking for sustained institutional inflows and a clear break above key resistance levels to confirm a true recovery from the latest downturn. The market’s quick bounce-back following the severe liquidation event underscores a resilient underlying confidence in digital assets, even as external uncertainties persist.