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Crypto market sentiment has plunged sharply, with the Crypto Fear & Greed Index dropping to a “Fear” level of 27, its weakest reading since April. The index which measures overall investor emotions toward digital assets had stood at 64 (“Greed”) just a day earlier.
The decline followed U.S. President Donald Trump’s announcement of a 100% tariff on Chinese goods on Friday, reigniting trade tensions that rattled global markets. Bitcoin (BTC) quickly reacted, falling from $110,920 to briefly touch $102,000 on Binance’s perpetual futures pair.
Over $19.27 billion worth of crypto long and short positions were liquidated in 24 hours, according to derivatives tracker CoinGlass, reflecting the scale of market stress. Ethereum, Solana, and other major assets also saw double-digit hourly losses before stabilizing late Saturday.
The Crypto Fear & Greed Index, widely followed by traders as a barometer of market emotion, measures volatility, volume, dominance, and social media sentiment. Historically, extreme fear readings often precede short-term rebounds which is a pattern analysts say could repeat this time.
Despite the panic, some experts are viewing the plunge in the Crypto Fear & Greed Index as a potential buying opportunity.
In an X post on Friday, Andre Dragosch, Head of Research at Bitwise Asset Management, said the firm’s proprietary Sentiment Index had “generated a strong contrarian buying signal.”
“The index reached an intraday low of -2.8 standard deviations as its lowest level since the ‘Yen Carry Trade Unwind’ in the summer of 2024,” — Andre Dragosch, Bitwise Asset Management.
Dragosch compared the situation to April 2024, when fear levels similarly peaked after a round of global trade tensions pushed Bitcoin down to $77,000 before rebounding weeks later.
Market analysts at Cointelegraph echoed the view that the market’s overreaction may set up a short-term recovery. “Extreme fear has historically been one of the best accumulation zones for long-term investors,” Cointelegraph’s market brief noted.
The tariff escalation marks a major shift in U.S. trade policy. According to Reuters, the Trump administration’s decision affects over $500 billion worth of Chinese goods, reigniting fears of another prolonged trade conflict.
Crypto markets have become increasingly correlated with macroeconomic trends, including U.S. dollar strength and global trade sentiment. The renewed trade tensions sent U.S. equity futures and commodities into a brief tailspin, while Bitcoin and Ethereum saw massive liquidations.
Earlier in the week, the Crypto Fear & Greed Index had sat firmly in “Greed” territory as Bitcoin hit a new all-time high near $125,100, according to TradingView data. However, Trump’s tariff news quickly reversed that optimism.
Investors shifted instantly from risk-on to risk-off, said a report from Bloomberg. The move underscores how vulnerable the digital asset space remains to macro and policy shocks.
Even before the tariff announcement, analysts noted that social media enthusiasm for Bitcoin’s new highs was surprisingly muted.
It was like a modest, run-of-the-mill reaction from the crypto audience, said Brian Quinlivan, a senior analyst at Santiment, in an interview with Thinking Crypto.
Really wasn’t much of anything, Quinlivan added. It’s not nearly as euphoric as some of these previous ones.
Quinlivan’s observation suggests investors may be adopting a more cautious stance, possibly reflecting fatigue after a volatile year marked by alternating regulatory wins and macroeconomic setbacks.
While the latest drop in the Crypto Fear & Greed Index has sparked anxiety among retail traders, many institutional analysts argue that the signal may mark the early stages of another accumulation phase.
The Alternative.me index has long been used as a contrarian tool, with previous “Fear” readings often preceding significant rallies.
As geopolitical uncertainty, inflation, and monetary policy continue to drive risk aversion, analysts expect the Crypto Fear & Greed Index to remain volatile but potentially predictive of short-term market reversals.
For now, the message from data analysts and trading desks is consistent: fear may be high, but for those betting on long-term value, extreme sentiment might once again prove to be an opportunity, not a warning.
