What to Know
- The cryptocurrency market is facing a notable downturn, with Bitcoin’s price nearing $80,000 on Sunday. Major tokens, including Dogecoin and Cardano’s ADA, have seen considerable losses.
- The crypto fear and greed index has reached a multi-year low, reflecting ’extreme fear’ among investors, largely due to a lack of impactful announcements at the recent White House Crypto Summit and ongoing international tariff conflicts.
- Investors are now carefully monitoring macroeconomic data and decisions, with some opting to purchase short-dated treasuries in anticipation of potential interest rate cuts by the Federal Reserve in May.
A continued sell-off in the cryptocurrency market has extended into its second week, with Bitcoin (BTC) prices dropping close to $80,000 on late Sunday. This has led to significant declines in many major tokens and altcoins.
Dogecoin (DOGE) and Cardano’s ADA are leading with nearly a 10% drop in the last 24 hours, followed by XRP which has decreased by more than 7%. Other prominent tokens like BNB Chain’s BNB, Ethereum (ETH), and TRON’s TRX have fallen by 5% while Bitcoin has lost 4%.
The crypto fear and greed index now stands at a multi-year low with a reading of 17, indicating extreme fear. This index helps to gauge investor sentiments, ranging from 0 (least sentiment) to 100 (highest sentiment), suggesting market conditions where buying opportunities might arise amid fear or a potential correction due to greed.
It factors in price volatility, momentum, social media sentiment, Google trends, and Bitcoin’s market share. Historically, it acts as a contrarian indicator in the short term.
Major tokens have lost all gains accrued after a prior announcement by President Donald Trump regarding a strategic crypto reserve in the U.S., which temporarily boosted prices by as much as 60%.
Investors had anticipated ongoing support for major tokens from U.S. purchases, but those hopes were diminished following the White House Crypto Summit, which resulted in minimal announcements and frameworks that did not meet market expectations.
As the global markets struggle amidst a trade war initiated by Trump and world leaders, the dollar index (DYX) has also reached its lowest since November, falling below 105, further pressuring risk assets.
Most traders are now adopting a cautious stance, observing upcoming economic data and regulatory moves.
“The summit signaled for more optimism,” Kevin Guo from HashKey Research remarked, “but there was considerable disappointment as anticipated policies and actions did not materialize.”
“Investors don’t expect a turnaround as Federal Reserve Chairman Jerome Powell reassured that the Fed will remain patient on the pathway to a 2% inflation rate.”
