Fear and Greed Index: Dropped to 10 (Extreme Fear), Bear Market level of 2018

1. Federal Reserve interest rate cut expectations collapsed
The likelihood of a rate cut in December fell from about 100% to less than 50%, as inflation in the United States is very strong and employment data is very good, with Federal Reserve officials continuing to adopt a hawkish stance. In a high-interest-rate environment, all high-risk assets are being sold ( tech stocks + cryptocurrencies ), as BTC/ETH is essentially considered a "high beta version of Nasdaq".
Nasdaq rose by 1% → Average increase of BTC/ETH by 3~4%
The Nasdaq 100 index has dropped by about 6~8% from its November peak.
The price of Bitcoin dropped from 126000 to 91000 → a decrease of about 28% ( about 4 times the Nasdaq )
2. Large outflow from the Bitcoin/Ethereum spot ETF
Since November, U.S. BTC ETFs have experienced consecutive negative net flows (, reaching their highest weekly amount of nearly a billion dollars ), as institutions took profits + hedged, resulting in liquidity being pulled from the market. Ethereum ETFs are suffering just as much. Originally, ETFs were the driving force that pushed BTC to $126,000 this year, and now they have become a "pulling machine."
3. The collapse of the high power
After the accumulation of a lot of leverage for the bulls following the peak in October, and breaking the psychological barriers at 100,000, 95,000, and 90,000, sequential liquidations surpassed 1 billion dollars, exacerbating the decline. Altcoins fared worse, with SOL, XRP, and DOGE dropping by 10-20%.
4. Concerns about the technology/AI stock bubble are leaking
Technology stocks declined ahead of Nvidia's earnings report (, the Nasdaq index fell continuously ), and the cryptocurrency market has been correlated with technology stocks at a correlation coefficient of 0.9 or higher, with all of them being liquidated. Now, the market considers BTC to be the "purest risk asset" for sale.
5. Seasonal liquidity tightening at year-end + overall uncertainty
The implications of the U.S. government shutdown, uncertainty over Trump's tariffs, poor Chinese economic data, tightening global dollar liquidity, and the initial impact on risk assets.