Crypto Fear Drops to 2022 Level as Markets Tumble

Bitcoin slid to $93,000 over the weekend, pushing market sentiment down to levels not seen since the 2022 downturn. The widely watched Crypto Fear and Greed Index fell to 10, a level that signals extreme fear and matches conditions from July of that year.

The sharp drop coincided with a wave of liquidations worth more than $617 million as hopes for near-term interest rate cuts faded. The move also followed a rough Friday session on Wall Street, in which major indexes fell more than 1.6%.

Roughly $242 million in Bitcoin positions were wiped out, while Ether accounted for $169 million. The largest single liquidation, nearly $31 million, came from a leveraged Bitcoin trade on Hyperliquid.

Shifting expectations around the U.S. monetary policy added to the pressure. Market odds for a Federal Reserve rate cut in December fell to 40% after sitting above 60% a week earlier. That adjustment pushed investors toward safer holdings and away from risk markets such as crypto.

Analysis from CryptoQuant suggested that the latest slide came mostly from short-term traders’ capitulation. Their short-term holder spending ratio stayed under 1 on multiple occasions, a signal that many were selling at a loss.

On-chain metrics also showed that coins moved within the last three months made up most of the activity during the sell-off. Long-term holders have increased sales since early autumn, although the pace still resembles typical profit taking rather than the heavy distribution that often appears at cycle peaks.

Despite the slide, BTC’s Realized Cap continued to climb, which indicates new buyers entering the market. The inflows, however, were not strong enough to offset heavy selling from older short-term holders and steady distribution from long-term holders. BTC remained about 9% above the average on-chain cost basis for spot ETF investors, which sat at $86,680.

CryptoQuant noted that the strongest downward pressure came from leveraged short-term traders who were forced to unwind during periods of stress. Even so, analysts said the current structure still looks like a correction within a broader bull phase rather than a transition into a full market top.

U.S. Bitcoin spot ETFs reported $1.11 billion in outflows between November 10 and 14, marking a third straight week of withdrawals. BlackRock’s fund saw the largest decline at $532 million, while Grayscale’s Mini Trust shed close to $290 million. Bitcoin spot ETFs currently hold $125.34 billion in assets, equal to 6.7% of BTC’s total market value.

Across the broader market, total crypto market value dropped to $3.31 trillion, down nearly 1%, trimming $1.1 trillion over the past six weeks.

The extreme fear reading echoed sentiment from July 2022, when BTC hovered between $19,000 and $20,000 following the Terra collapse. The difference this time is that fear is appearing at almost five times the price. Historically, that kind of divergence can occur near longer-term bottoms, although past examples also show that recovery does not always begin immediately.

Established companies like BitFuFu Inc. (NASDAQ: FUFU) usually include the likelihood of such downswings in their plans, so they are unlikely to suffer any significant adverse effects during this particular downturn in the market.

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