Crypto Fear and Greed Index at its Lowest Level Since September

The crypto fear and greed index has plummeted to 25, marking its lowest level since September 2024, indicating extreme fear in the market as Bitcoin retraces below $93,000.

The Fear and Greed Index, created by the software development firm Alternative, gauges market sentiment on a scale from 0 (Extreme Fear) to 100 (Extreme Greed).

As of February 25, the index has fallen a staggering 24 points from 49 to 25 within a single day, transitioning from “Neutral” to “Extreme Fear,” its lowest point since 2024 when it registered at 22.

This sudden drop has followed a wider market sell-off. In the last 24 hours, both Ethereum (ETH) and Solana (SOL) have seen declines of 10% and 14% respectively, while Bitcoin (BTC) has slipped beneath $93,000. Alongside Bitcoin’s downward trend, Bitcoin ETF withdrawals have surpassed $1 billion in the last two weeks.

Data from Coinglass reveals that the downturn in the crypto market has resulted in $957.85 million in liquidations, with $886.47 million stemming from long positions.

Meanwhile, open interest has dropped by 5% to $108 billion, reflecting a decrease in risk tolerance. The spike in liquidations suggests that the market was previously overly optimistic, which exacerbated the sell-off by eliminating leveraged bets.

This retreat may have been primarily influenced by additional pressure on the crypto markets due to macroeconomic uncertainty.

Markets have been on edge following U.S. President Donald Trump’s announcement on February 24 that his administration will implement 25% tariffs on Canada and Mexico. Furthermore, worries regarding the Federal Reserve postponing rate cuts due to higher-than-forecast inflation data have kept borrowing rates elevated.

The $1.4 billion hack of Bybit, one of the largest exchange breaches in history, has also adversely affected market sentiment. Although Bybit has managed to recover the losses from the hack, the market continues to feel the impact of security concerns related to the incident.

Nevertheless, analysts have observed that the market’s reaction remains more tempered than it was during the FTX collapse in 2022, even as sentiment falters. This suggests a maturing cryptocurrency market.