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Krypto sentiment drops to "extreme fear"

Since Monday evening, the Bitcoin price has been in a sharp decline, while major altcoins such as Ripple and Solana are being corrected even more severely.

By Mike Hesp
• 2 min read
Krypto sentiment drops to extreme fear

Since Monday evening, the Bitcoin price has been in a sharp decline, while major altcoins such as Ripple and Solana are being corrected even more severely. According to the Fear and Greed Index, there is "extreme fear" among crypto investors for the first time since September.

At the beginning of the month, this mood indicator was still at 72 points, indicating positive market sentiment. However, the index has now plummeted to only 21 points, which indicates great uncertainty in the market.

Trump's trade offensive as a driver of panic

The recent wave of panic is mainly attributed to the trade strategy of former President Trump. During a press conference with French President Macron, Trump announced that the planned punitive tariffs on Mexico and Canada would “continue as usual.”

This led to massive selling in the crypto market. While the US stock index S&P 500 lost just 2.66% over the past week, Bitcoin, Ethereum and other major cryptocurrencies posted double-digit losses.

In addition, the recent billion-dollar hack at crypto exchange Bybit already caused uncertainty among investors. At the same time, there is currently a lack of positive signals that could herald a change to a bullish trend.

Fear as a purchasing opportunity?

Historically, periods when fear dominated the market often proved to be interesting buying opportunities for long-term investors. When the Bitcoin price fell to $54,000 in September, it offered the last chance to get in cheaply before the sharp rise in the fourth quarter.

Those who bought Bitcoin in December 2022, in the midst of the panic after the FTX crash, are still sitting on a gain of over 400% despite the current correction.

While the Fear and Greed Index is not a standalone investment signal – as a single indicator can never capture the full complexity of the market – it has pointed out attractive “crypto discounts” in the past.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.