Crypto Fear & Greed Index Plunges to Its Lowest Score in More Than 2 Years as Bitcoin Drops Below $90,000

A key Bitcoin and crypto sentiment tracker, the Crypto Fear & Greed Index, has fallen to its lowest score in more than two years

Key takeaways:

A key Bitcoin and crypto sentiment tracker, the Crypto Fear & Greed Index, has fallen to its lowest score in more than two years as Bitcoin (BTC) plummeted below $90,000.

The index slipped deeper into “Extreme Fear,” reaching a score of 10 on February 26, the lowest since June 2022.

Many observers have blamed heightened macroeconomic uncertainty for the sentiment plunge, which comes after the sentiment indicator entered the “Extreme Greed” territory the day prior, on February 25.

The Crypto Fear & Greed Index has slipped to its lowest level in over two years as Bitcoin (BTC) price fell below $90,000 and major macroeconomic uncertainty continues to weigh on markets.

According to the latest data from the index, which measures the collective mood of crypto traders and is based on an algorithm that factors in market volatility, social media engagement in cryptocurrencies, and other market trends, the index has dropped to a score of 10.

This marks the lowest level the index has reached since June 2022, when crypto hedge fund Three Arrows Capital (3AC) began to see its downfall.

At the time, the cryptocurrency market was in the midst of a downturn that saw several major crypto firms collapse, including Terraform Labs, which developed the Terra (LUNC) and TerraClassicUSD (USTC) tokens, and Celsius, which paused all user withdrawals just weeks after its native token Celsius (CEL) dropped 90%.

However, there were no major crypto collapses in the days leading up to the sentiment plunge on February 26, with many observers instead attributing the bleak mood to macroeconomic uncertainty.

The sentiment indicator also entered the “Extreme Greed” territory the day prior, on February 25. This occurred as Bitcoin dropped below $90,000 for the first time since November, after US President Donald Trump said a day earlier that his planned 25% tariffs on Canada and Mexico “are going to be happening, and they’re going to be starting on time, on schedule.”

More recently, Trump said during a February 26 cabinet meeting that he will also be imposing a 25% tariff on the European Union.

At the time of writing, Bitcoin is down 17.32% over the past 30 days, trading at $84,408, according to CoinMarketCap data.

The last time the index dropped to such low levels was on June 19, 2022, when the index dropped to 6 as Bitcoin tumbled to $19,000, having lost 37% over 30 days.

At the time, the downfall was largely attributed to the collapse of the TerraUSD stablecoin, which lost its peg to the US dollar (USD) on May 9, 2022. Panic selling wiped out a combined $60 billion from the crypto ecosystem.

The impact rippled through the entire crypto industry. 3AC faced insolvency fears on June 16 after it failed to meet margin calls from its lenders. 3AC was later ordered into liquidation on June 27. On July 13, Celsius entered into bankruptcy proceedings.

Ben Simpson, founder of Collective Shift, told Cointelegraph in an interview that the current market conditions could present a buying opportunity for crypto investors.

“The Simple strategy over the past few years has been to buy during extreme fear and sell during Greed. If you’ve done that, you’ve really outperformed the market and probably outperformed most traders,” Simpson said.

According to Simpson, the crypto market’s negative sentiment stems from the fact that high expectations following Donald Trump’s inauguration have not been met.

“We’re in a funny world where people are still bearish on crypto but no one is short the market. Everyone's still massively long Bitcoin and Ethereum (ETH) but they're just annoyed they didn't get a 10x return after Trump said we'd be having the best economy in history after his inauguration in 2017,” Simpson added.

Echoing a similar sentiment, Swyftx lead analyst Pav Hundal told Cointelegraph that “it is an unforgiving environment right now, and it’s draining confidence. The next few weeks could be rocky, but global liquidity levels have been rising week-on-week, and historically, that is a leading indicator for Bitcoin. March is shaping up to be an important month.”