Crypto Fear and Greed Index Hits 10 — Market Enters Extreme Fear Mode

The Crypto Fear and Greed Index stands at 10, the lowest since June 2022, suggesting more fear among the investors. The extreme fear phase triggered a sell-off across the market, registering $559,41 million in outflows for Bitcoin ETFs in a four-day period. Institutional investors appear to be pulling back on exposure, which adds even more pressure to an already aggressively selling market.

The market decline liquidated over $1 billion in leveraged long positions in less than three days. The cascading effect forces traders to close positions and sends Bitcoin down faster at $86,167. The ferocity of these sell-offs has heightened uncertainty in the market, pushing even more investors toward panic.

External Factors Weigh on Crypto Sentiment

Concerns over macroeconomics have further aggravated the uncertainty. Trump has imposed a 25% import tariff on the European Union, raising fears of a trade war that could keep investors very cautious about high-risk assets, including cryptocurrency. Also, the Bybit exchange was hacked for $1,5 billion, further lowering market confidence and increasing withdrawals from centralized trading platforms.

Is a Market Rebound Possible?

Though the sentiment remains exceedingly negative now, historically, extreme fear has very often been followed by a market rebound. Bitcoin has generally tended to rebound from these types of lows on the Fear and Greed Index and presents a potential opportunity for risk-taking investors. Whether this extremely fearful period turns out to be a trend reversal in the coming weeks, or whether we plunge further, remains to be seen.