The Crypto Fear & Greed Index dropped 24 points from 49 to 25 in a single day, its lowest level since 2024 when it stood at 22 points. The change from “Neutral” to “Extreme Fear” shows that investors are becoming more worried as big cryptocurrencies drop sharply in value. Bitcoin, Ethereum, and Solana dropped by over 10%. Bitcoin has dropped below $93,000, and Ethereum has lost 11.34 percent of its worth.
Market liquidations ETF outflows
There is a lot of fear because of the huge $957.85 million in liquidation that happened yesterday, with $886.47 million coming from long roles. This wave of sales has taken place in positions that were too leveraged, which has made the drop in crypto prices even worse. Also, Bitcoin ETF withdrawals have gone over $1 billion in the last two weeks, which shows that investors are losing faith and don’t want to take risks.
Macroeconomics Increase Pressure
Aside from market volatility, worries about the economy are also affecting the crypto area. U.S. President Donald Trump’s announcement of 25% tariffs on Canada and Mexico has shaken markets around the world. At the same time, fears that the Federal Reserve will delay interest rate cuts because inflation is still high have kept borrowing costs high. Because the economy is unclear, investors are moving their money to safer assets, which is causing more crypto to leave the market.
Security Breach Raises Investor Concern
A recent $1.4 billion hack of Bybit, one of the biggest exchange hacks in history, made things even worse. Even though Bybit was able to cover its losses, the breach has made everyone in the business very worried about security. Furthermore OKX’s $505 million settlement with U.S. officials has increased awareness of regulatory risks, which has made people even more worried about increased scrutiny of crypto exchanges.
Conclusion
Analysts say that the current downturn is not as bad as the FTX crash in 2022, even though fear is gripping the market. Investors are still being careful, but how quickly the market can stabilize in the next few weeks will show whether this is just a short-term drop or the beginning of a long-term downward trend.
