Crypto Sentiment Sinks to Lowest Level in 3.5 Years

Market Sentiment - Investor fear in the crypto market has intensified, reaching levels not seen since the collapse of the Terra Luna ecosystem in mid-2022, driven by a macro-led selloff [1] - The Crypto Fear and Greed Index has plummeted to 9, indicating "Extreme Fear" and marking its lowest level in 42 months [1] Bitcoin Performance - Bitcoin's price has fallen to a 15-month low of $60,255, representing a 52.2% decline from its all-time high of $126,080 in October 2025 [1] - Aggregated open interest for Bitcoin futures has dropped to $21.96 billion, a 15-month low, indicating a mass exodus of speculative capital [4] Macroeconomic Factors - The U.S. Dollar Index (DXY) has increased from 95.205 to 97.685, tightening financial conditions and contributing to the downturn in the crypto market [3] - Analysts highlight that Federal Reserve policy uncertainty and geopolitical tensions are exacerbating market stresses, with potential for Bitcoin to decline further [2] Market Dynamics - The correlation between crypto and equities remains strong, with macroeconomic factors playing a significant role in the current downturn [3] - Options markets show a defensive tilt, with traders paying a premium for bearish bets as downside protection, indicated by Bitcoin's 7-day and 30-day 25-delta skew falling below -28 and -24, respectively [4] Sector-Specific Concerns - The primary driver of the current market sentiment is a risk-off wave stemming from fears in the tech and AI sectors, leading to doubts about the sustainability of Big Tech's massive capital expenditures [5]