- As per the data from Coinglass, the slump in the crypto market resulted in $957.85 million in liquidations, out of which $886.47 million came from long positions.
- The recent $1.4 billion hack of a prominent crypto exchange is referred to as one of the biggest exchange hacks ever.
- Also, the analysts have highlighted that the market response is still more calculated than it was at the time of the FTX collapse in 2022.
The crypto fear and greed index has gone down to 25, the lowest level since September last year, indicating an extreme fear state in the market as Bitcoin goes down below $93,000.
The Fear and Greed Index offered by software development company Alternative, estimates market sentiment on a scale of 0, which indicates extreme fear to 100, which indicates extreme greed.
As of Today, the index has gone down to 24 points from 49 to 25 in just one day, moving from Neutral to Extreme Fear, its lowest level since last year, when it dropped to 22. This sharp drop follows a wider market sell-off.
In the last 24 hours, Ethereum and Solana have gone down around 10% and 14% respectively, at the same time Bitcoin has gone down below $93,000. Overlapping with the decline of Bitcoin, taking off from Bitcoin ETFs has now surpassed $1 billion in the last two weeks.
Open Interest witnesses decline
As per the data from Coinglass, the slump in the crypto market resulted in $957.85 million in liquidations, out of which $886.47 million came from long positions. At the same time, Open Interest has gone down by 5% to $108 billion, signaling a decline in risk tolerance.
The hype in liquidations highlights a previously overly confident look, which intensified the sell-off by clearing out leveraged positions. This backout may have been highly triggered by an extra strain on the crypto markets because of macroeconomic volatility.
Markets have been alerted by the revelation of President Donald Trump on February 24 that his government will go on with 25% tariffs on Canada and Mexico. Adding more to this, worries relating to the Fed delaying rate reduction because of higher-than-anticipated inflation data have made borrowing rates high.
Other factors influencing the fear and greed index
The recent $1.4 billion hack of a prominent cryptocurrency exchange is referred to as one of the biggest exchange hacks ever, has also impacted the market sentiment in a negative way. However, the exchange has been successful in recovering the loss from the attack, but the market is still lurching from security concerns revolving around the matter.
Also, the analysts have highlighted that the response of the market is still more calculated than it was at the time of FTX collapse in 2022, even at a time when sentiment is weak. This shows a maturing crypto market.
