Crypto fear index reaches Celsius, Terra, 3AC collapse levels
The Index, which measures overall sentiment in the crypto market, has not seen levels this low since the collapse of multiple crypto firms in 2022.
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 plummeted below $90,000.
On Feb. 26, the Crypto Fear & Greed Index slipped deeper into “Extreme Fear,” reaching a score of 10.
Bitcoin falls under $85,000
That’s its lowest level since June 2022, when crypto hedge fund Three Arrows Capital (3AC) started to see its downfall — and just a month after the collapse of Terraform Labs’ Terra (LUNC) and TerraClassicUSD (USTC) tokens, along with crypto lender Celsius pausing all user withdrawals just weeks after its native token Celsius While there were no major crypto collapses ahead of the sentiment plunge on Feb. 26, many observers have blamed heightened macroeconomic uncertainty.
The sentiment indicator first entered the “Extreme Greed” territory the day prior, on Feb. 25. That’s when 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 forward on time, on schedule.” More recently, Trump said during a Feb. 26 cabinet meeting that he will also be imposing a 25% tariff on the European Union.
At the time of publication, Bitcoin is down 17.32% over the past 30 days, trading at $84,408, according to CoinMarketCap data.
It bears a resemblance to 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 ordered into liquidation on June 27. On July 13, Celsius entered into bankruptcy proceedings.
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Analysts weigh in on fearful crypto sentiment
Collective Shift founder Ben Simpson told 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,” Simpson said.
“If you’ve done that, you’ve really outperformed the market and probably outperformed most traders,” Simpson said.
He explained that the crypto market’s negative sentiment comes from high expectations following Donald Trump’s inauguration not being met:
“There is not much to be hopeful or excited about at the moment. Everyone had put a lot of confidence in Donald Trump to push his crypto angle, but at the moment, he is busy doing other things.”
Echoing a similar sentiment, Swyftx lead analyst Pav Hundal told 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,” Hundal said.
