Historic panic grips crypto markets as Bitcoin erases weekend rally
A sharp $3,000 drop within 120 minutes sent Bitcoin tumbling, pushing the Crypto Fear and Greed Index back to record lows once more.
On Monday, the Crypto Fear and Greed Index returned to its historical lows as Bitcoin dropped more than 4% during the trading day, declining to $64,300 and erasing all upward momentum accumulated since the end of last week.
Data from CoinGlass reveals that over the past 24 hours, more than 136,000 traders faced liquidation, with aggregate liquidations reaching $458 million. Of these forced closures, 92% represented leveraged long positions that were wiped out.
Throughout the weekend, Bitcoin experienced upward momentum, reaching a peak of $68,600 on Saturday. However, the digital asset has now retreated to a support level at the lower boundary of a sideways trading channel that emerged following its dramatic selloff to $60,000 on Feb. 6.
The leading cryptocurrency currently trades 48% beneath its October all-time high of $126,000 and remains 5.5% under its previous peak of $69,000 established during the 2021 bull run.
Fear and Greed Index at historic lows
The Crypto Fear and Greed index from Alternative.me, a tool that gauges overall sentiment across cryptocurrency markets, has dropped back to a reading of 5 out of 100, signaling conditions of "extreme fear."
Since its inception in 2018, the index has only registered such depressed levels on three occasions — during August 2019, June 2022, and earlier within the current month.
Glassnode, a provider of on-chain analytics, published findings on Monday showing that the seven-day moving average for net realized losses among recent investors remained close to $500 million per day, highlighting ongoing capitulation among this cohort.
"While the intensity has cooled, the broader regime still signals a market under pressure, with participants in the base formation phase continuing to capitulate."
Bitcoin Sharpe Ratio also at historical lows
In related developments, analyst Michaël van de Poppe shared on Saturday what he described as a "phenomenal chart" demonstrating that Bitcoin's Sharpe Ratio has declined to -38.4, "which historically has marked 'low risk' accumulation zones."
This ratio evaluates Bitcoin's performance in relation to the associated risk exposure, demonstrating the level of return an investor might anticipate for every unit of risk undertaken.
