Crypto Market Flips into Extreme Fear Conditions, Even as Community Members Wait for Altcoin Season

A sudden price crash across almost all the top cryptocurrencies confused many users, leaving them unsure whether to hold on for a potential upside reversal

The crypto market downturn continued on Monday, with almost all the critical indicators bearish, according to data from CoinmarketCap.

The total crypto market cap dropped to $2.97 trillion at the time of writing, while the Fear and Greed Index slipped into an “extreme fear” figure of 29.

This generated varying opinions from analysts, especially considering that many members of the crypto community were waiting for an altcoin season, which remained dull throughout the past few months.

Crypto Market Shows Signs of Fear, Altcoin Season Index Low

CoinmarketCap’s Fear and Greed Index, a measure of market sentiment, fell to 29 on Monday, indicating “extreme fear” among investors following the recent crypto market crash.

The index, which analyzes several metrics to gauge market optimism or pessimism, began the year in a “greed” zone but quickly shifted to “fear” in the past few weeks.

A majority of the indicators used by the index pointed towards a bearish market on Monday, with only a few minor indicators showing bullish signals.

The Fear and Greed Index is designed to help investors make informed decisions based on market psychology, which can often influence short-term price movements.

However, it’s important to note that the index is not a precise predictor of future market performance and should be used in conjunction with other analysis methods.

After Crash, Bitcoin Loses 5.3%, Shaking Off Worst Single-Day Loss in Two Months

The price of Bitcoin (BTC) dropped by 5.3% on Monday, marking the most significant single-day loss for the cryptocurrency since the first week of January.

Despite the sharp decline, BTC managed to hold onto the crucial $90,000 support level, which bodes well for the flagship cryptocurrency.

Bitcoin began the year with a strong bullish momentum, rallying past the $70,000 resistance within the first few days of 2023. The cryptocurrency then rallied further to hit a high of $96,000 in mid-February.

However, BTC has been trading within a range for the past few weeks amid anticipation for an altcoin season, which remained dull throughout the first half of 2023.

The recent sell-off pressure follows a failure to break past the upper range, leading to a sell-off in the markets.

Top Altcoins Crash Deeply, ETF Outflows Reach $387.6 Million

The top altcoins also faced significant sell-off pressure on Monday, with Ethereum (ETH) tumbling by 9.5% to trade at $2,473.

Meanwhile, BNB (BNB) and Solana (SOL) both lost around 6% and 14% of their respective values.

The altcoin market performance remained dull throughout 2023, despite anticipation among members of the crypto community.

An altcoin season index, which measures the performance of smaller cryptocurrencies relative to Bitcoin, showed that the season remained “extremely low” on Monday.

On the other hand, crypto ETFs saw a net outflow of $387.6 million on Monday, indicating a strong preference for selling crypto assets among investors.

This outflow comes after several weeks of inflows, which began in early 2023 following the bullish market recovery.

Some Investors See “Extreme Fear” as Time to Buy More Crypto Depite Losses

The recent crypto market downturn has left many investors wondering whether to hold on for a potential upside reversal or to sell their digital assets and avoid further losses.

Despite the massive losses, a section of the crypto market community believes there is every reason to stay bullish. More so, they consider the extreme fear market condition an opportunity to accumulate more crypto assets following their belief that the bull run will continue.

However, it’s crucial to remember that the crypto market is highly volatile and can change rapidly.

Investors are advised to exercise caution and conduct their own research before making any investment decisions.