Bitcoin Slides Over 4% to $64,300 as Fear‑and‑Greed Index Dips to Historic Low
The leading cryptocurrency lost more than $3,000 in under two hours on Monday, pushing the market‑wide sentiment gauge to “extreme fear.”
Market movement
At the opening bell on Monday, Bitcoin broke below the $68,000 level it briefly touched over the weekend and fell to around $64,300, a decline of roughly 4.3% in a span of 120 minutes. The drop erased the gains accumulated since Friday and leaves the digital asset trading near the lower bound of a channel that formed after the February 6 slump to $60,000.
The price slide places Bitcoin about 48% beneath its October 2023 all‑time high of $126,000 and roughly 5.5% under the 2021 peak of $69,000.
Liquidity crunch
Data from the analytics firm CoinGlass show that the past 24 hours saw over 136 000 trader positions liquidated, amounting to $458 million in total. The overwhelming majority—about 92%—of those liquidations were leveraged long positions, underscoring the bearish thrust behind the recent move.
Sentiment reaches “extreme fear”
Alternative.me’s Crypto Fear and Greed Index, which aggregates market‑wide metrics such as volatility, volume, market dominance and social media buzz, fell to a score of 5 out of 100 on Monday. The index classifies scores below 20 as “extreme fear,” a level only observed three times since its launch in 2018 (August 2019, June 2022, and earlier this month).
On‑chain pressure
Glassnode’s on‑chain analysis highlighted that the seven‑day moving average of net realized losses for recent entrants remained close to $500 million per day. The firm interpreted the sustained outflow as continued capitulation by investors who entered the market at higher price levels.
“While the intensity has cooled, the broader regime still signals a market under pressure, with participants in the base‑formation phase continuing to capitulate,” a Glassnode analyst noted on X.
Sharpe Ratio at a trough
Bitcoin’s Sharpe Ratio—a risk‑adjusted performance metric—has slipped to ‑38.4, according to analyst Michaël van de Poppe. Historically, such deep negatives have coincided with what some observers label “low‑risk accumulation zones,” where the asset is perceived as cheap relative to the risk taken.
Analyst perspective
Van de Poppe posted a chart on Saturday labeling the current risk‑adjusted return as “phenomenal” because the ratio is near its lowest historical levels (only eclipsed twice before). Some market participants view this as a potential inflection point, while others caution that the persistence of high‑leverage liquidations could keep downside pressure alive.
Key takeaways
| Factor | What happened | Implication |
|---|---|---|
| Price | BTC dropped >$3k in <2 h, now $64.3k | Immediate downside risk; testing support at the bottom of the post‑Feb 6 channel. |
| Liquidations | $458 million liquidated, 92% longs | Leverage unwind may exacerbate price moves; reduced long‑side exposure. |
| Fear‑and‑Greed Index | Score 5/100 (extreme fear) | Market sentiment is heavily negative; could attract contrarian buyers. |
| On‑chain losses | Net realized losses ≈ $500 m/day (7‑day MA) | Ongoing capitulation among recent entrants, suggesting a weak hands‑off. |
| Sharpe Ratio | ‑38.4, near historic lows | Risk‑adjusted return is deeply negative, historically linked to accumulation phases. |
| Long‑term context | Trading 48% below Oct 2023 ATH, 5.5% below 2021 peak | Significant upside potential remains on paper, but price action is constrained by current sentiment. |
Outlook
The confluence of a steep price correction, a surge in leveraged long liquidations, and an extreme‑fear reading on the sentiment index points to a market that is still searching for direction. While a low Sharpe Ratio and historically low sentiment could set the stage for a bounce, the on‑chain data suggest that many investors are still exiting positions. Traders should monitor volume spikes, changes in liquidation patterns, and any rebound in the Fear and Greed Index as early signals of a possible turnaround.
As always, participants are advised to conduct independent research and consider risk management strategies before taking positions.
Source: https://cointelegraph.com/news/bitcoin-drops-back-record-fear-levels-as-it-wipes-weekend-gains?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
