Crypto market sentiment remains near historic lows, with the BTC Fear and Greed Index bottoming at 5, beneath levels seen during prior major crypto shock events. Risk-off conditions continue to pressure equities and crypto, while the U.S. dollar and Treasuries moved higher.
The FOMC minutes from the January meeting struck a notably hawkish tone, with rate hike language appearing for the first time this easing cycle. CME futures now price just two rate cuts for 2026, with the first not expected before June.
Beneath the fear, BTC ownership appears to be shifting toward institutions, funds, and ETFs, with ETF AUM as a share of market cap holding strong despite a ~50% drawdown. Within DeFi, a subset of Neo Finance protocols, some of which have seen growing institutional engagement, has outperformed broader L1, L2, and DeFi benchmarks YTD. The relative strength is even more so evident among protocols with consistent revenue generation and usage profiles.