The cryptocurrency market has been in a downward spiral for two consecutive weeks, with Bitcoin (BTC) dropping to nearly $80,000 on Sunday. This decline has triggered sell-offs across major tokens and altcoins, with Dogecoin (DOGE) and Cardano’s ADA losing 10%, XRP dropping 7%, and Ethereum (ETH), Binance Coin (BNB), and TRON (TRX) falling around 5%. Bitcoin itself lost 4%, pushing the Crypto Fear and Greed Index to a multi-year low of 17, signaling extreme fear among investors.
The index, which measures market sentiment from 0 (fear) to 100 (greed), is influenced by volatility, momentum, social media trends, and Bitcoin’s dominance. Often, extreme fear indicates a potential buying opportunity, while excessive greed warns of a correction.
Earlier this month, crypto markets briefly surged following President Trump’s announcement of a strategic crypto reserve. XRP, Solana’s SOL, and ADA saw gains of up to 60%. However, optimism faded when it became clear the reserve consisted only of previously seized assets, with no new purchases planned.
The anticipated White House Crypto Summit on March 7 failed to deliver bold policy moves. Instead, it outlined stablecoin legislation expected by August and suggested lighter regulations, but these announcements did little to support the market.
Meanwhile, global markets remain under pressure amid an escalating tariff war led by Trump and other world leaders. The Dow Jones dropped 890 points, the S&P 500 declined 2.7%, and the Nasdaq fell 4%. Tesla shares also tumbled 15%, marking a 50% drop from their December high. The U.S. dollar index (DXY) slipped below 105, indicating weakness, which typically pressures risk assets like crypto.
Investors are in a wait-and-see mode, monitoring economic indicators and Federal Reserve policies. Fed Chair Jerome Powell reaffirmed a patient stance on interest rates, dampening hopes for immediate cuts. However, traders have begun buying short-term treasuries, betting that rate cuts could resume by May—a potential catalyst for renewed interest in crypto markets.
With uncertainty ahead, investors remain cautious, assessing market shifts and regulatory developments before making moves.
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