The Fear and Greed Index has suddenly dropped to 25, indicating growing fear among market participants as Bitcoin falls below $93,000.
Sharp Decline in Fear and Greed Index
The Fear and Greed Index, provided by the firm Alternative, measures market sentiment on a scale from 0 (Extreme Fear) to 100 (Extreme Greed). As of February 25, the index plummeted from 49 to 25 in a single day, marking its lowest level since 2024 when it stood at 22.
Overall Crypto Market Situation
This steep index decline follows a broader market sell-off. In the past 24 hours, Ethereum and Solana have lost 10% and 14% in value respectively, while Bitcoin has fallen below $93,000. Coinciding with Bitcoin’s decline, withdrawals from Bitcoin ETFs have exceeded $1 billion in the past two weeks. According to Coinglass data, the market downturn led to $957.85 million in liquidations, of which $886.47 million were from long positions. Meanwhile, open interest has decreased by 5% to $108 billion, indicating a decline in risk tolerance.
Factors Affecting the Market
This pullback may largely be a result of additional strain on crypto markets due to macroeconomic uncertainty. Markets have been alarmed by U.S. President Donald Trump’s announcement of moving forward with 25% tariffs on Canada and Mexico. Additionally, concerns about the Fed delaying rate cuts amid higher-than-expected inflation have kept borrowing rates high. The $1.4 billion Bybit hack, one of the biggest exchange exploits ever, has also negatively impacted market sentiment. Although Bybit has been successful in covering the loss, the market is still reeling from the security concerns surrounding the incident.
Analysts note that the market's response is more measured than during the FTX collapse in 2022, even while sentiment is weak, indicating a maturing cryptocurrency market.
