Bitcoin’s Fear & Greed Index has plummeted to 10, its lowest level since June 2022, indicating extreme fear among investors.
Despite the panic in the market, experts say this may be the best time to buy.
Sentiment Falls as BTC Price Continues to Fall
The index, which measures market sentiment, has fallen from 49 weeks ago (neutral) to 10 today, indicating extreme fear. According to Alternative.me, the company that publishes the metric, extreme fear often indicates that investors are overly concerned about market conditions, which could be a buying opportunity.
However, analysts are divided. Some point to historical data that shows extreme fear often precedes price recoveries. On the other hand, BitMEX co-founder Arthur Hayes has warned that Bitcoin, the largest cryptocurrency by market cap, could fall as low as $70,000 before stabilizing.
The ongoing turmoil in the market has caused the price of BTC to fall from nearly $99,000 last week to below $84,000, a three-month low. Currently, BTC is trading at nearly $86,000, the cryptocurrency’s poor performance has dragged the entire market into a sharp decline. Major altcoins such as Ethereum (ETH), Solana (SOL), and Binance Coin (BNB) have also seen significant drops, sending many traders into panic mode.
The sharp decline has caused the total crypto market value to plunge below $3 trillion, losing at least $200 billion in a single day. During the same period, over $1 billion in leveraged positions have been liquidated due to the market crash.
Currently, the total crypto market capitalization is at $2.95 trillion, down 4.3% in the last 24 hours. In addition, Bitcoin’s dominance has increased to 57.6%, signaling a shift of investor funds away from riskier altcoins.
What’s Driving This?
Experts list several key factors causing panic in the markets:
Trade tensions between the United States and major trading partners such as Canada, Mexico, and China are escalating.
U.S. President Donald Trump has announced new tariffs on goods from all three countries.
Trump has also threatened to impose a 25% tax on imports from the European Union (EU), claiming the bloc was created to “cheat” the United States.
Massive outflows from the Bitcoin ETF market, with a record $938 million being withdrawn in a single day.
This lack of institutional confidence in Bitcoin ETFs has accelerated a wave of massive selling, sparking deeper fears in the market.
