Extreme Fear Replaces Greed in Crypto Market After $120 Billion Drawdown
The Crypto Fear and Greed Index fell to 24 on January 21, 2026, signaling a pointy return to excessive worry after briefly coming into greed territory final week.
Market sentiment has deteriorated sharply as cryptocurrencies face one other main drawdown amid escalating geopolitical tensions.
Crypto Market Sentiment Collapses Into Extreme Fear
BeInCrypto reported earlier this week that President Trump’s tariff threats towards the European Union sparked a wider market sell-off, weighing closely on threat belongings. The stress intensified on Tuesday.
Speaking at Davos, US Treasury Secretary Scott Bessent reaffirmed the Trump administration’s readiness to deploy tariffs as a main geopolitical software, a stance that additional unsettled world markets.
BeInCrypto Markets information confirmed that Bitcoin (BTC) fell beneath the $90,000 degree, even briefly dipping below $88,000. Ethereum (ETH) additionally dropped below $3,000.
The total sell-off erased more than $120 billion from the overall cryptocurrency market capitalization over the previous 24 hours.
Derivatives markets mirrored the severity of the transfer, with widespread pressured liquidations. More than 182,000 merchants had been liquidated in the past day, pushing complete liquidations to $1.08 billion. Long positions accounted for $989.9 million of the losses.
The sharp sell-off has additionally weighed closely on investor sentiment. The Crypto Fear and Greed Index dropped to 24 at this time. This marks a return to excessive worry after the market reached greed territory at 61 simply final week, on January 15.
“Risk-off is again. Capital is operating for security,” a market watcher wrote.
The index supplies a broad snapshot of crypto market psychology. It aggregates data from multiple elements, together with volatility, market quantity and momentum, social media exercise, Bitcoin dominance, and Google Trends.
Analysts Weigh In as Crypto Confidence Weakens
In a publish on X (previously Twitter), analyst Rex mentioned investor curiosity in the sector has deteriorated to the purpose of widespread apathy. The present temper appears much more worrying as a result of it’s pushed not solely by value however by rising disillusionment with crypto’s long-term narratives.
The analyst famous that even long-time crypto members are more and more shifting their focus to shares and commodities. This signifies a lack of confidence moderately than only a momentary lull.
“No one needs to make angel investments in this area, nobody believes any of the bullshit narratives.. No one cares anymore. It actually can’t get any worse for sentiment than proper now.. Bottom of the COVID crash folks nonetheless believed in this trade, what we’ve got now could be worse,” the post learn.
Nonetheless, some buyers stay confident a few comeback. Analyst Doc steered that sentiment at Bitcoin’s precise backside will seemingly be worse than after the FTX collapse, even when the present drawdown is smaller.
This conviction is predicated on the assumption that cryptocurrency stays a strong uneven funding, with long-term upside outweighing draw back threat regardless of prevailing pessimism.
“I’m not a giant predictions man, but when I needed to decide one- sentiment on the precise BTC backside will probably be worse than post-FTX regardless of the bitcoin drawdown not even coming near 2022 and crypto will as soon as once more be one of the best uneven guess in capital markets. That’s why I’m staying,” he noted.
Looking forward, market path will seemingly hinge on how macroeconomic and geopolitical developments evolve in the approaching weeks. Until readability emerges, volatility could stay elevated and sentiment fragile.
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