Crypto Fear Index Hits 7; Bitcoin Clings to $60K Support

Panic has officially set in. The Crypto Fear & Greed Index dropped to 7/100 today, marking a level of “Extreme Fear” not seen since the FTX collapse of 2022. The reading confirms a total sentiment capitulation as Bitcoin struggles to defend the $60,000 level, nearly 50% down from its October 2025 all-time high.

The Numbers: A 50% Haircut

Bitcoin’s slide to ~$60,000 completes a brutal drawdown from the $126,198 peak recorded on October 6, 2025. While the asset attempted a recovery in mid-January, peaking briefly at $95,000, liquidity vanished, forcing a “lower high” market structure that emboldened bears.

Retail capitulation is now quantifiable. Google searches for “crypto capitulation” surged 400% this week. Meanwhile, derivatives markets flushed $15 billion in leveraged long positions over the last 48 hours, a deleveraging event on par with the 2021 May crash.

“This is the first time in the current cycle that sentiment has hit Terra-era fear levels while Bitcoin still trades tens of thousands above prior bear-market lows,” noted analysts reviewing the disconnect.

The Disconnect

Here lies the discrepancy. In 2022, a “7” on the fear index corresponded to Bitcoin trading at $16,000. Today, the same panic exists at $60,000. This divergence suggests the market is reacting to unmet expectations rather than systemic insolvency.

Institutional flows tell a different story. Data from Coinbase shows a positive premium returning, indicating that while retail traders exit at a loss, U.S. entities are bidding the dip. ETF inflows remain net positive despite the price action, signaling a transfer of inventory from weak hands to long-term custodians.

What to Watch

Bears are eyeing a breakdown below $58,500, which could trigger a liquidation cascade toward $42,000. Bulls need a daily close above $69,000 to invalidate the immediate downtrend. Until then, cash is king.