How Bitcoin’s 5% flash crash pushed fear index to record low: Assessing…
Following Bitcoin’s 5% drop in two hours on the twenty second of February, the Crypto Worry and Greed Index dived as soon as once more.
It had been inside the “excessive concern” area all through February, however fell to a studying of 5 on Monday.
As Joao Wedson, CEO and Founding father of intelligence platform Alphractal, noticed, the final time the index reached this low was in 2019. Analysts count on the worth to go to the community’s realized worth at $54k.
It’d must drop additional south to deliver members to a part of “most stress” earlier than the cyclical restoration can start. The falling Bitcoin [BTC] costs and extreme fear conditions drove a capital flight from crypto.
Supply: USDT.D on TradingView
The USDT Dominance displays the USDT market cap as a proportion of the entire crypto market cap. Rising USDT.D tendencies indicate crypto costs are trending downward, and market members really feel safer on the sidelines, holding stablecoins.
The stablecoin reserve on exchanges grew in the direction of the tip of 2025. It represented rising shopping for energy ready to catch the underside. This establishment was very true from September to November.
Over the previous month, the total supply of stablecoins has shrunk from $161.19 billion to $153.75 billion. Throughout this time, USDT.D leapt larger as soon as extra.
The previous month’s developments captured capital fleeing the crypto market (redeemed to fiat). Mixed with the intense concern seen on the Crypto Worry and Greed Index, it confirmed that the market was firmly within the fingers of the bears.
Lengthy-term Bitcoin holders had been distributing
The Lengthy-Time period Holder Web Place Change measured the 30-day change in provide accountable for long-term holders (holders of BTC aged not less than 155 days). The large unfavorable spike on the fifth of February noticed 244,866 BTC movement from the LTH provide.
The falling worth tendencies and heavy long-term distribution bolstered the bear market circumstances and low conviction in BTC.
Stablecoin provide and the Tether dominance additional illustrated market members remaining sidelined and exiting crypto.
Ultimate Abstract
- The Crypto Worry and Greed Index reached 5 on Monday, lows final seen in 2019.
- Onchain metrics highlighted the bearish strain on Bitcoin and the remainder of the crypto market.
