Crypto Fear & Greed Index Plummets 42 Points - Is Another Market Meltdown Coming?
Fear grips crypto markets as sentiment indicators flash red.
The Dramatic Drop
Market confidence evaporated this week with the Fear & Greed Index recording one of its steepest single-week declines in recent memory. The 42-point plunge signals growing investor anxiety across digital asset markets.
Technical Breakdown
Multiple factors converged to trigger the sentiment collapse - regulatory uncertainty, institutional hesitation, and technical chart patterns all contributed to the panic. Trading volumes spiked as both retail and professional investors repositioned their portfolios.
Historical Precedent
Previous instances of such rapid sentiment deterioration have often preceded significant price corrections. The current reading places markets firmly in 'extreme fear' territory, traditionally a contrarian indicator for seasoned traders.
Market professionals watch these sentiment swings with cynical amusement - because nothing says 'stable store of value' like 42-point weekly mood swings. The real question isn't whether markets will recover, but when the next emotional extreme will hit.
Bitcoin Stalls at $110K as US–China Tensions Spark Flight to Gold
The rapid shift in sentiment mirrors growing unease across global markets.
Bitcoin hovered just above $110,000 on Thursday, struggling to hold key support as renewed US–China trade tensions dampened risk appetite.
The flight to safety was underscored by Gold hitting new record highs above $4,230 per ounce, signaling investor preference for traditional safe-haven assets.
Meanwhile, exchange-traded fund (ETF) data showed sustained outflows. U.S. spot Bitcoin ETFs saw withdrawals of $94 million on Wednesday, extending a multi-day streak of redemptions.
Derivatives data also pointed to mounting selling pressure, with total liquidations surpassing $418 million over the past 24 hours.
Long positions outnumbered shorts by more than 2.4 to 1, suggesting that many Leveraged traders were caught off guard as prices retreated.
The Fear and Greed Index is sitting at extreme fear and the VIX is at 25 while $SPY & $QQQ are still less than 3% from all time highs.
The data and the mood are telling two very different stories. pic.twitter.com/QutmyyEjV2
On-chain data paints an equally cautious picture. Long-term holders, wallets with coins held for over 155 days, have sold roughly 265,700 BTC in the past month, the largest such outflow since January.
Analysts interpret this as profit-taking amid heightened volatility, a signal that even veteran investors are trimming exposure.
“The MOVE reflects rising caution among veteran holders amid volatility, painting a bearish scenario for the cryptocurrency,” said Milad Azar, Market Analyst at XTB MENA.
As reported, Bitcoin may be nearing a critical turning point, according to trader Tony “The Bull” Severino, who believes the next 100 days could determine whether the cryptocurrency enters a parabolic rally or ends its current bull cycle.
Severino pointed to the Bollinger Bands indicator on Bitcoin’s weekly chart, which has tightened to levels unseen before, often a precursor to sharp price moves in either direction.
Severino cautioned that “head fakes,” or false breakouts, are common during such setups. He noted bitcoin recently failed to break above the upper band with strength after briefly touching $126,000, suggesting a potential dip before any sustained rally.
BitMEX Chair Says Ethereum Could “Flip” Bitcoin Like Equities Overtook Gold After 1971
Ethereum could eventually surpass Bitcoin’s market share, similar to how U.S. equities overtook gold following the end of the gold standard in 1971, according to BitMEX chair Tom Lee.
Speaking with ARK Invest CEO Cathie Wood, Lee compared Ethereum’s potential rise to the shift that occurred after the “Nixon Shock,” when the US dollar became fully synthetic and unpegged from gold.
Lee noted that the move away from gold created massive demand for financial products tied to the dollar, paving the way for Wall Street’s dominance.
“The market cap of equities today is $40 trillion compared to $2 trillion for gold,” he said, highlighting how financial innovation transformed the dollar’s role globally.
