Crypto Fear Hits Terra-Era Lows as Bitcoin Slides Further
- Bitcoin tumbled over 50% from its peak as fear reached levels last seen in 2022.
- Trading volume surged while futures interest sank, showing a rapid exit from risk assets.
- Dollar strength and tech stock losses deepened pressure across crypto markets globally.
Investors are creeping out across crypto markets. This is because the market has deepened to levels unseen since mid-2022, as a macro-driven selloff pushed Bitcoin to fresh multi-month lows and drained speculative appetite. Bitcoin fell to $60,255 on Thursday, a 15-month low and a 52.2% drop from its October 2025 peak of $126,080. At the same time, the Crypto Fear and Greed Index slid to 9, placing sentiment firmly in extreme fear and marking its weakest reading in 42 months.
Data from Alternative. me showed sentiment showed at 9 on February 6, unchanged from the prior day but far below last week’s 16 and January’s reading of 42. The index tracks price action, momentum, and demand, and it weakened sharply as selling pressure intensified across global markets.
Source: Alternative.me
Market Stress Deepens as Bitcoin Volatility Surges
Bitcoin extended losses on February 6, trading at $65,229, down 9.02% over 24 hours, according to CoinMarketCap. Earlier in the session, prices briefly dipped near $60,000 before staging a modest rebound, reflecting unstable trading conditions.
Market capitalization fell to $1.3 trillion, down 9.06% on the day, as broad risk aversion spread across major assets. The trading volume increased by 72.87%, reaching $145.28 billion.
The increase raised the volume-to-market-cap ratio to 11.19%, indicating that traders were making large position changes due to intense market volatility.
The circulating supply of Bitcoin reached 19.98 million coins, which created options for issuing new coins as the price movements became more pronounced during trading sessions.
Macro Pressures Drive Risk Aversion
Analysts linked the selloff to tightening financial conditions and synchronized declines across global markets. Tim Sun, senior researcher at HashKey Group, said the drawdown reflects restricted liquidity and shared risk-aversion dynamics across asset classes. He noted that global assets now respond to similar financing pressures as liquidity fails to expand meaningfully.
Related: What is the Crypto Fear & Greed Index? How to Use it?
Jeff Ko, chief analyst at CoinEx Research, pointed to Bitcoin’s weekly drop of over 20% alongside a selloff in U.S. technology stocks. He cited stretched valuations and long-standing concerns over an artificial intelligence-led bubble weighing on sentiment. Ko added that Amazon recorded a double-digit decline after mixed earnings, prompting investors to question Bitcoin’s reliability as a safe haven relative to gold.
Derivatives Data Signals Defensive Positioning
Market participants increased their caution after observing that speculative investors abandoned the derivatives markets. CryptoQuant data showed aggregated Bitcoin futures open interest falling to $21.96 billion, marking a 15-month low that indicates market participants are selling off their assets.
The options markets showed a defensive market trend; the weekly and 30-day 25-delta skews dropped below -28 and -24. The levels show that traders paid more to acquire protection against price declines because they expected market downturns, which caused them to bet on negative price movements. Andri Fauzan Adziima, who works as the research lead at Bitrue, stated that companies became risk-averse during this period because of their expenditures on technology and artificial intelligence.
The U.S. Dollar Index increased from 95 to 97 from January 27 up until now because Japanese bond market disruptions created market conditions that affected the yen carry trade. Bitcoin currently struggles to attain stability. Market sentiment resembles the Terra Luna collapse from May 2022, while investors worldwide exhibit lower risk tolerance.
