- The sentiment in the crypto market hits a record low as bearish pressure on Bitcoin intensifies amid macro events in the US and Mexico.
Crypto market sentiment has fallen to a multi-year low. The Crypto Fear & Greed Index indicates a score of 5 within the “Extreme Fear” territory on Monday.
The metrics indicate that retail investors are too worried to enter the market, which is contributing heavily to the ongoing selling pressure. The trend mirrors the same level of sentiment in 2019, in the aftermath of the crypto bubble burst, and in 2022, during the long crypto winter.
The event is the result of a confluence of macro events rattling the already fragile market, following the liquidation of many retail players since the 10/10 crisis last year.
Bitcoin Drops to $64,000
Bitcoin (BTC) sank from a $68,235.23 high to a $64,350.40 low in the last 24 hours heading to Monday morning, causing a ripple effect in the market. It led to the liquidation of over $223.73 million in BTC positions, with longs accounting for $206.78 million of the wrecked trades per Coinglass data.
Overall, the crypto sector suffered $480.37 million worth of liquidations from leveraged positions, dominated by $434.21 million longs. The largest single liquidation during the period occurred on HTX at a BTC-USDT pair valued at $61.51 million.
Adding fuel to the FUD (Fear, Uncertainty, Doubt) was the unprecedented rise in the Bitcoin Exchange Whale Ratio, as the charts hit 0.64. CryptoQuant highlighted that the figures are currently at their highest since 2015.
The bad news is that when the top 10 wallets control 64% of the inflows, it often signals increased sell-side pressure from large holders. Investors are on the lookout for the next moves of these key market participants, as they could steer the near-term trajectory of Bitcoin and other major altcoins.
However, some members of the crypto community are downplaying the bearish sign. They argue that the pattern, which coincides with “Extreme Fear” sentiment, has historically preceded redistribution rather than massive sell-offs.
Nonetheless, a majority considers the situation as confirmation of a possible long bear market or another crypto winter, as the signs point to similar occurrences in 2019 and 2022.
The Macro Pressures
Furthermore, two major events have shaken the equities and crypto markets in the past few days. One was US President Donald Trump’s pronouncement about layering the existing tariffs on imports with an extra 10%. The move came in response to a Supreme Court decision declaring that he had overstepped his authority under the International Emergency Economic Powers Act (IEEPA).
Another was the turmoil in Mexico in the immediate aftermath of the death of Nemesio “El Mencho” Oseguera Cervantes, head of the biggest drug cartels in the country. CNN reported that his demise catalyzed violent clashes between suspected members and allies of the Jalisco New Generation Cartel (CJNG) and Mexican armed forces. It also resulted in economic disruptions in affected regions and the suspension of international flights to the country.
