- Crypto Fear & Greed Index drops to 25, the lowest level since Sept 2024, signaling extreme fear.
- Bitcoin fell below $90K, liquidating 284K traders, with $886M from long positions.
- Trump’s tariff plans and Bybit’s $1.4B hack fuel market uncertainty, adding to selling pressure.
The cryptocurrency market has taken a sharp turn, with panic spreading among traders. The Crypto Fear and Greed Index has plummeted to 25, indicating extreme fear in the market. This marks its lowest level since September 2024. The drop comes amid heavy selling pressure, liquidations, and growing uncertainty in the global economy.
Source: coinglass
Bitcoin, the leading cryptocurrency, has fallen below $90,000, triggering a massive sell-off across the market. As a cascading effect, the liquidations surged significantly across the market. According to Coinglass data, 284,368 traders were liquidated over the past 24 hours. The total liquidations accounted for $881.96 million in total, signaling excessive leverage. Ethereum and Solana have also suffered significant drops, with Ethereum losing 10% and Solana dropping 14%.
The sudden reaction in the market has some connection to past events. During the last two weeks, Bitcoin ETFs experienced over $1 billion worth of withdrawals, which intensified market fear. Institutional investment withdrawal from Bitcoin ETFs often indicates a wider bearish attitude in the market. Meanwhile, US President Donald Trump has also made an announcement about the new tariff policies, which impacted the economy.
On February 24, Trump confirmed that his administration would proceed with a 25% tariff on imports from Canada and Mexico. The proposed policy intends to defend national industries but spurs worries concerning price increases as well as economic turbulence. Risky assets including cryptocurrencies received an instant hit after Trump announced his tariff implementation.
Related: Bitcoin Dips Below $96K, SOL Falls, Small Caps Surge: Report
The situation became more critical with news of a major security breach. One of the major crypto exchanges, Bybit, endured a $1.4 billion attack raising alarm over security concerns in the cryptocurrency space. Despite Bybit recovering the losses, investor trust still remains injured following the incident.
Meanwhile, market data indicates a significant decline in open interest, which dropped by 5% to $108 billion. This suggests traders are pulling back, reducing exposure to volatile conditions. The increase in Market liquidations has also revealed an overleveraged market condition as traders were caught off guard by the sudden price decline.
Despite the market turmoil, analysts believe the situation is not as severe as the FTX collapse in 2022. The response appears more measured, indicating a maturing cryptocurrency market. However, with extreme fear dominating investor sentiment, market participants remain cautious about the road ahead.
