[DigitalToday reporter Yoonseo Lee (이윤서)] Bitcoin investor sentiment has retreated to levels seen before the August rally.

On Oct. 12 (local time), blockchain media outlet Decrypt reported that the crypto fear and greed index stood at 56, down from 67 a week earlier. It was also far below this year’s high of 82, recorded on Aug. 26.

The index ranges from 0 to 100 and reflects investors’ risk appetite, with 0 meaning extreme fear and 100 meaning extreme greed. The market mood was in the “extreme greed” zone until late August, but has now fallen to a “neutral” level.

Bitcoin prices also showed weakness. Bitcoin rose to $86,978 early last week but slid as low as $81,749.83 at one point on Oct. 8, a drop of about 6 percent. It later rebounded partly, but was down about 4 percent on the week while holding above $83,000.

The cooling in market sentiment was also seen in fund flows. Spot bitcoin exchange-traded funds (ETFs) saw $484.9 million leave last Wednesday, the biggest one-day outflow since June. Another $244.1 million flowed out the next day. There was a net inflow of $21.1 million on Friday, but October as a whole has seen a net outflow of $386.3 million. Ethereum funds also extended outflows for a ninth straight session, bringing cumulative outflows this month to $635 million.

A worsening macro backdrop also weighed on bitcoin and the broader crypto market. Brent crude topped $101 a barrel last week, and the yield on 30-year U.S. Treasuries rose to 5.70 percent, the highest level since 2002. Stocks, gold and bitcoin fell together that day. The market is viewing this as a risk-asset selling wave driven by macro factors rather than by crypto-specific issues.

Rising oil prices could push up consumer inflation by driving up transport, manufacturing, agriculture and travel costs. If inflation pressures grow, it leaves less room for the U.S. Federal Reserve (Fed) to cut rates.

Rising Treasury yields further weaken risk appetite. If 30-year Treasuries offer a yield of 5.70 percent, money could quickly flow out of risk assets. Since bitcoin is classified as a risk asset along with equities, it is more likely to face downside pressure as yields rise and concerns about tightening grow.

Participants in prediction markets are also lowering their expectations. On prediction market Myriad, traders priced in a 45 percent chance that bitcoin would reach $87,500 within October. That was down from 55 percent on Oct. 7. The probability of reaching $90,000 also fell over the same period, to 28 percent from 36 percent.

By contrast, the downside outlook has risen. Myriad traders see a 56 percent chance that bitcoin will fall to $80,000 in October. The probability of a drop to $77,500 was priced at 33 percent, and the probability of $75,000 at 20 percent.

Bitcoin’s summer rebound raised expectations that it had emerged from a bear market. During the August rally, bitcoin prices rose 24.9 percent, and Tom Lee, co-founder of Fundstrat and chairman of Bitmine, also mentioned an end to the bear market. Recently, however, as the fear and greed index has fallen to “neutral” and ETF outflows have continued, market attention has shifted from extending the rally to macro factors and the possibility of further corrections.