Crypto Market Plummets as Bitcoin Hits $80K, Sentiment Index Signals ‘Extreme Fear’
Cryptocurrency traders are bracing for further losses as Bitcoin’s sharp decline sparks panic across digital assets, driving market sentiment to its lowest point in over a year.
The ongoing sell-off in the crypto market deepened for a second straight week, with Bitcoin (BTC) tumbling to around $80,000 late Sunday. This decline set off a broader slump across major altcoins, further dampening investor confidence.
Dogecoin (DOGE) and Cardano (ADA) led the downturn, each plummeting nearly 10% in the last 24 hours, while XRP dropped over 7%. Meanwhile, Ethereum (ETH), BNB Chain’s BNB, and Tron (TRX) each lost around 5%, with BTC itself down 4%.
The Crypto Fear and Greed Index, a key measure of market sentiment, fell to 17—its lowest level since mid-2023—indicating ‘extreme fear’ among investors.
Market Sentiment at Multi-Year Lows
The Crypto Fear and Greed Index ranges from 0 (extreme fear) to 100 (extreme greed) and is influenced by factors such as price trends, market momentum, social sentiment, and Google search data. A reading this low suggests widespread uncertainty, though historically, extreme fear has sometimes preceded a market rebound.
This latest downturn has wiped out all gains made earlier this month when President Donald Trump announced a strategic U.S. crypto reserve. The news initially fueled a surge in XRP, Solana (SOL), and ADA, pushing them up as much as 60% in a matter of days.
However, the enthusiasm quickly faded as Trump clarified that the reserve would primarily consist of previously seized BTC holdings, while non-BTC assets would only be classified as a ‘stockpile,’ rather than actively utilized. This dampened hopes for large-scale institutional adoption.
White House Crypto Summit Fails to Deliver Market Boost
Further adding to market woes, the much-anticipated White House Crypto Summit on March 7 ended without any groundbreaking policy shifts. Instead, officials outlined a plan for stablecoin regulation set to be finalized by August and reiterated commitments to easing regulatory pressures—both of which failed to generate significant market momentum.
Global Economic Factors Weigh on Crypto
Macroeconomic conditions have also contributed to the market downturn. The intensifying trade conflict initiated by Trump and other global leaders has fueled economic uncertainty, with ripple effects across traditional financial markets. Meanwhile, the U.S. dollar index (DXY) fell below 105—its lowest level since November. While a weaker dollar can sometimes boost crypto prices, broader risk aversion has kept traders on edge.
“The summit was expected to provide a clearer direction, but it left traders underwhelmed,” Kevin Guo, Director of HashKey Research, told CoinDesk. “Without strong policy shifts, crypto continues to follow the downward trend in U.S. equities, especially after February’s job report showed resilience despite public sector layoffs.”
Additionally, Federal Reserve Chairman Jerome Powell reaffirmed a cautious approach toward inflation, reducing expectations for imminent interest rate cuts. Historically, lower interest rates have been bullish for risk assets, including cryptocurrencies.
A Potential Reversal on the Horizon?
Despite the current market downturn, some traders remain optimistic about a potential recovery. Bloomberg reports that investors have been buying short-term U.S. Treasuries, signaling expectations that the Federal Reserve may start cutting interest rates as soon as May to prevent economic stagnation. If this happens, capital could flow back into high-risk assets like crypto, potentially igniting a market rebound in the coming months.
