Crypto Panic Deepens as Fear Index Hits 8 and Liquidations Surge to $375M
- Crypto panic intensifies as Fear and Greed Index collapses to an extreme reading of 8.
- Over $375 million in liquidations wipe out 124,557 traders in a 24-hour cascade.
- Bitcoin and Ethereum lead broad losses as tariff headlines pressure risk markets.
Crypto markets lost their footing again, and the tone shifted fast. During early trading sessions, the Fear and Greed Index fell to 8, a level associated with outright capitulation. The reading, tracked by CoinNess, placed sentiment deep inside the “extreme fear” band, territory usually reserved for disorderly pullbacks rather than routine corrections.
Source: CoinNess
However, the mood change was not subtle. Liquidation data and spot prices moved in tandem, reinforcing a sense that traders were backing away all at once. Figures compiled by CoinGlass showed that $375.45 million in crypto derivatives positions were wiped out over 24 hours, underscoring a rapid unwind of leveraged exposure.
Sentiment Hits Rare Lows
The Fear and Greed Index, which aggregates volatility, trading activity, and broader engagement signals, runs from zero to 100. A reading of 8 suggests markets are operating with minimal risk appetite. Such readings tend to appear when downside momentum has already accelerated and confidence thins out quickly.
Consequently, red screens dominated across the majors. CoinMarketCap data indicated that each of the top 20 cryptocurrencies by market value declined over both the daily and weekly time frames. Losses ranged from 1% to as much as 12%, underscoring that the weakness was broad rather than isolated.
Source: CoinMarketCap
Bitcoin, for instance, slipped 4.42% to trade near $63,044, while Ether dropped 3.41% to around $1,822. The total crypto market capitalization also fell 2.98%, landing near $2.19 trillion. None of the moves was historic in isolation. Taken together, they reinforced the sense of coordinated retreat.
Long Positions Bear the Brunt
Following these adverse sentiments, the derivatives desks absorbed the sharpest impact. Of the $375.05 million in liquidations, long positions accounted for $291.38 million, a major contrast with shorts, which represented $84.69 million. The imbalance points to a classic long squeeze, where leveraged bullish bets are forced to unwind into falling prices.
Source: CoinGlass
In total, 124,557 traders were liquidated within the day. Not to leave out, the largest single order, valued at $2.95 million, occurred on Aster’s BTCUSDT pair. Per the report, Bitcoin alone saw approximately $150 million in liquidations, while Ether followed with $105 million.
The pattern was straightforward: as prices drifted lower, margin thresholds were breached. Automated closures added to the selling pressure. Momentum fed on itself for several hours before stabilizing.
Macro Crosscurrents Return
The selloff did not occur in isolation. Market data showed an 88% correlation between crypto assets and the S&P 500 ETF, SPY, which declined 0.9% during the same period. The alignment suggests digital assets were moving in step with broader risk markets rather than carving out an independent path.
Besides, equities reacted to renewed trade tensions tied to former President Donald Trump. Reports indicated the U.S. Supreme Court ruled that former President Donald Trump had exceeded his authority when invoking emergency powers to impose sweeping tariffs.
However, within hours, Trump turned to Section 122 of the Trade Act of 1974, announcing a 10% duty on imports and later stating the rate would rise to 15%, the maximum allowed under current law.
The timing overlapped with renewed selling in equities and cryptocurrencies alike. Traders cited policy uncertainty as one factor behind the repositioning.
Related: Is DOGE Primed for a Breakout as the $0.09 Floor Remains Intact?
A Market in Defensive Mode
With the Fear and Greed Index at 8 and hundreds of millions in positions erased, the current stretch reflects defensive behavior rather than selective rotation. The liquidation imbalance, the broad-based declines, and the equity correlation all point in the same direction.
Crypto panic, as reflected in the fear and greed index, has become measurable in both sentiment and leverage data. Whether conditions stabilize will depend on how quickly risk appetite returns. For now, the numbers show a market pulling back, decisively and without much hesitation.
