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Extreme Fear Returns to Crypto: What Investors Should Know

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Extreme Fear in Crypto Markets

The Crypto Fear & Greed Index fell to 5 on Thursday, signaling a sharp deterioration in market sentiment as digital asset prices continue to slide.

The decline reflects intensifying panic among investors, with risk appetite eroding amid broader global market uncertainty.

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Crypto Sentiment Sinks Deeper Into “Extreme Fear” 

The Crypto Fear & Greed Index measures the overall emotional state of the cryptocurrency market on a scale from 0 to 100. Readings between 0 and 24 indicate Extreme Fear, 25 to 49 signal Fear, 50 represents Neutral conditions, 51 to 74 reflect Greed, and 75 to 100 denote Extreme Greed.

At 5, the index places the market firmly in Extreme Fear territory. The latest drop comes amid a steady decline in sentiment over recent weeks. 

Extreme Fear in Crypto Markets
Extreme Fear in Crypto Markets. Source: Alternative.me

A month ago, the index stood at 26, already within the Fear range. It slid to 12 a week earlier and registered 11 just a day before reaching its current low. The rapid deterioration highlights how quickly confidence has unraveled as prices weakened.

The collapse in crypto sentiment coincides with a broader surge in global economic anxiety, as evidenced by the World Uncertainty Index. The index tracks how frequently the term “uncertainty” appears in Economist Intelligence Unit country reports. 

It covers more than 140 countries and provides a quarterly, cross-country indicator widely used in macroeconomic research and global risk analysis.

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In the third quarter of 2025, the World Uncertainty Index surged to an all-time high above 100,000. In the fourth quarter, it was recorded at 94,947. 

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Those levels are roughly double the peaks observed during previous major crises, including the COVID-19 pandemic, Brexit, and the Eurozone debt crisis.

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“Rising geopolitical tensions, volatile markets, and policy uncertainty are driving the spike, as investors struggle to price in what comes next,” Coin Bureau wrote.

World Uncertainty Index
World Uncertainty Index. Source: Federal Reserve Bank of St. Louis

The elevated reading signals heightened anxiety across global markets as investors grapple with unpredictable economic and political conditions. Against this backdrop, the crypto market’s plunge into Extreme Fear reflects not only falling prices but also a broader retreat from risk assets worldwide.

Crypto Market Cap Falls 22% in 2026 as Bitcoin and Ethereum Extend Losses 

The collapse in sentiment comes as the broader crypto market continues to move downwards. In 2026, total market capitalization has fallen by more than 22%, reversing the optimism that defined the start of the year.

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Bitcoin, which began January on a stronger footing, ended the month down by more than 10%. It has dropped another 14.6% so far in February.

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Ethereum has also fallen 33.8% year to date. The sustained drawdown has weighed on market activity.

Analysts Weigh Crypto Market’s Next Move 

Amid these bear market conditions, the community remains uncertain about what comes next. Analyst Kyle Chassé pointed to historical precedents, noting that similarly depressed readings in the Crypto Fear & Greed Index were seen in 2018, March 2020, and in the aftermath of the FTX collapse in 2022.

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“Every time, it marked a massive opportunity window. No, it doesn’t guarantee the bottom. But historically, peak fear is where asymmetry lives,” he said.

Other analysts argue the current downturn could represent a shakeout phase before a potential breakout. Still, it remains unclear when, or if, a broader crypto market recovery will follow

Ray Youssef, CEO of NoOnes, has forecasted that Bitcoin could trade sideways until summer 2026. He noted that the exact location of the Bitcoin bottom remains unclear and that current dynamics increasingly suggest the market has entered a protracted reassessment of risk.

Youssef pointed to several structural factors, including US political and monetary cycles, persistent inflation constraints, weakened retail capital flows, and cautious institutional demand following heavy losses.

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“As a result, we are unlikely to see a V-shaped reversal before the summer of 2026. More likely, we will see regular rebounds, triggered by short-covering and short squeezes,” he told BeInCrypto.

According to Youssef, such rebounds could be strong, ranging between 20% and 30%, and potentially prolonged. However, he warned they may ultimately prove to be bull traps. 

He stated that crypto traditionally remains in a long accumulation phase within a single range before the start of a true bull market.

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Crypto World

Binance CEO Richard Teng breaks down the ‘10/10’ nightmare that rocked crypto

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Binance CEO Richard Teng breaks down the ‘10/10’ nightmare that rocked crypto

Binance did not cause the crypto market liquidation event on Oct. 10, but every exchange — centralized or decentralized — saw massive liquidations that day after China imposed rare earth metal controls and the U.S. announced fresh tariffs, said Binance Co-CEO Richard Teng.

About 75% of the liquidations took place around 9:00 p.m. ET, alongside two unrelated, isolated issues: a stablecoin depegging and “some slowness in terms of asset transfer,” Teng said Thursday at CoinDesk’s Consensus Hong Kong conference.

“The U.S. equity market plunged $1.5 trillion in value that day,” he said. “The U.S. equity market alone saw $150 billion of liquidation. The crypto market is much smaller. It was about $19 billion. And the liquidation on crypto happened across all the exchanges.”

Some users were affected by this, which Binance helped support, he said, an action other exchanges did not take.

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Binance facilitated $34 trillion in trading volume last year, he said, with 300 million users. Trading data does not indicate any massive withdrawals from the platform.

“The data speaks for itself,” he said.

Speaking more broadly, Teng said the crypto market was tracking broader geopolitical tensions but that institutions are still pouring into the sector.

“At the macro level, I think people are still uncertain about interest rate movements going forward,” he said. “And there’s always the trend of geopolitics, tension, etc. Those weigh on these assets, such as crypto.”

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However, pointing to how the sector has changed over the past four to six years, Teng said long-term industry participants will have noticed that crypto prices move cyclically.

“I think what we have to look at is the underlying development,” he said. “At this point in time, retail demand is somewhat more muted compared to the past year, but the institutional deployment, the corporate deployment is still strong.”

Institutions are still entering the sector, even despite the market, he said, “meaning the smart money is deploying.”

Read more: Crypto’s $19 billion ’10/10′ nightmare: Why everyone is blaming Binance for the bitcoin crash that won’t end

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Nikkei 225 Retreats From Record High

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Nikkei 225 Retreats From Record High

As the chart shows, the Nikkei 225 index (Japan 225 on FXOpen) reached a historic high near 58,500 points on Monday. Bullish sentiment was driven primarily by political developments.

According to media reports, the rally followed the decisive victory of the Liberal Democratic Party (LDP) under Sanae Takaichi, who has signalled aggressive fiscal stimulus measures (a package exceeding $135 bn), food tax cuts, and the continuation of an accommodative monetary policy stance.

However, today the Nikkei 225 is showing signs of a pullback. It is possible that major market participants have begun taking profits amid the wave of optimism, as Takaichi’s victory had already been largely priced in, and official confirmation of a parliamentary supermajority may have acted as a trigger to close long positions.

From a technical perspective, a retracement also appears justified.

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Technical Analysis of the Nikkei 225 Chart

It is worth noting that:

→ after the RSI moved into extreme overbought territory, it formed a bearish divergence with price;
→ price action itself produced a bearish triple top pattern.

As the decline unfolds, a local trendline (shown in purple) has shifted from acting as support to functioning as resistance.

In light of the above, it is reasonable to assume that an extended pullback could drive the Nikkei 225 towards the median of the long-term ascending channel.

In the event of a deeper correction, the support zone below the 56,000 level may come into play, where a previous bullish imbalance formed characteristics of a Fair Value Gap pattern.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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ARK Invest Snaps Up $33M in Robinhood Shares Amid Bitcoin Dip

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ARK Invest Snaps Up $33M in Robinhood Shares Amid Bitcoin Dip

ARK Invest, the investment firm led by Bitcoin bull Cathie Wood, snapped up a significant batch of crypto-linked stocks on Wednesday as BTC briefly dipped below $66,000.

ARK purchased 433,806 shares of Robinhood (HOOD) for approximately $33.8 million, according to a trade notification reviewed by Cointelegraph.

The asset manager also boosted its exposure to crypto exchange Bullish (BLSH) and USDC (USDC) issuer Circle (CRCL), acquiring 364,134 shares valued at $11.6 million and 75,559 shares worth $4.4 million, respectively.

The purchases came as all three stocks traded lower on the day, with Robinhood shares sliding nearly 9%, according to TradingView data.

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ARK withheld from buying more Coinbase (COIN) shares after dumping $17 million of the stock last week.

Robinhood becomes top crypto holding in ARK’s flagship fund

ARK’s latest Robinhood acquisition coincided with the company’s official testnet launch of the Robinhood Chain, a permissionless layer 2 (L2) blockchain built for financial services and tokenized real-world assets (RWAs).

Earlier this week, Robinhood reported record net revenue of nearly $1.28 billion for the fourth quarter of 2025. While revenue surged 27% year over year, it fell short of Wall Street expectations of $1.34 billion, sending the stock down about 8%.

Source: Robinhood

As of Feb. 11, Robinhood stands as the largest crypto-linked position in ARK’s flagship ARK Innovation ETF (ARKK), accounting for roughly 4.1% of the portfolio, or about $248 million, according to the fund’s data.

Spot Bitcoin ETFs mirror BTC weakness as inflows stall

Broader market weakness has spilled over into US spot Bitcoin (BTC) exchange-traded funds (ETFs), which failed to sustain momentum after a three-day inflow streak.

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According to SoSoValue data, Bitcoin ETFs recorded $276.3 million in net outflows on Wednesday, nearly wiping out weekly gains, which now stand at just $35.3 million. Total assets under management declined to $85.7 billion, the lowest level since early November 2024.

Daily flows in US spot Bitcoin ETFs. Source: SoSoValue

Ether (ETH) ETFs also posted losses, with daily outflows totaling $129.2 million. XRP (XRP) funds saw no inflows, while Solana (SOL) ETFs recorded modest inflows of roughly $0.5 million.

Related: Strategy CEO eyes more preferred stock to fund Bitcoin buys

At the time of publication, Bitcoin was trading at $67,227, up 0.4% over the past 24 hours, according to CoinGecko.

The latest pullback comes after analysts had pointed to a potential inflection point in crypto investment products following three consecutive weeks of outflows totaling more than $3 billion.

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