Crypto Market Hits ‘Extreme Fear’ as Sentiment Plunges

The Fear & Greed Index reveals deep market anxiety, reflecting a significant downturn in investor sentiment.

The Fear & Greed Index, a popular metric measuring market sentiment, has plummeted to 17 out of 100, indicating "Extreme Fear." This level surpasses the lows seen during the FTX collapse in November 2022, highlighting a profound sense of uncertainty in the crypto market.

The index, which gauges factors such as volatility, trading volume, social media sentiment, and market momentum, reflects a market on edge. A score of 0 indicates extreme fear, while 100 represents extreme greed.

This recent drop follows significant turmoil in the crypto market. Over $1 billion in liquidations occurred on Monday, affecting nearly 280,000 traders. Bitcoin dropped nearly 15%, and Ethereum fell almost 24%, marking steep declines for these major cryptocurrencies.

The selloff was triggered by the Bank of Japan's 25 basis point interest rate hike and a weak U.S. jobs report, raising fears of an economic downturn. These events sent shockwaves through the industry, exacerbating existing anxieties.

Tuesday's reading of 17 is even lower than during the FTX collapse, which bottomed at 20. The FTX collapse, marked by reckless bets and misuse of customer funds, led to significant market distress and investor losses.

The current scenario mirrors that dark period, with the sharp decline in the index suggesting that market participants are bracing for further downturns and are hesitant to take new positions.

photo source / Blockonome