Fear Index Hits All-Time Low, Has the Crypto Market Truly Turned Bearish?
Original Article Title: "Panic Index Hits All-Time Low, Is the Crypto Market Really Bearish Now?"
Original Article Author: 1912212.eth, Foresight News
Market sentiment has plunged to freezing levels.
In the early hours of February 27, Bitcoin failed to hold its ground at $87,000 and once again began a continuous decline, dipping to around $82,000 at around 4 a.m., hitting a new low since November 2024. At the same time, its panic index has dropped to 20, hitting a new low since 2022, with the market still in a state of extreme fear.

After failing to stabilize above $2,800, Ethereum continued to slide, briefly rebounding to $2,500 in recent days before being hit again, dropping to a low of around $2,200. SOL, amid meme fatigue and the negative impact of a large unlock on March 1, has plummeted to around $130, hitting a new low since September 2024.
Altcoins have seen mixed movements. In terms of futures contract data, according to Coinglass, there was a $765 million liquidation of open futures contracts in the past 24 hours, with long liquidations totaling $608 million, and the largest single liquidation worth $8.2054 million.
As market sentiment deteriorates and morale wavers, where is the issue?
Bitcoin Spot ETF Data Continues to Show Net Outflows
Bitcoin spot ETF data is a key indicator of market fund flows. If balances were relatively neutral in January, the situation completely reversed in February. By the end of February, there were even multiple instances of significant net outflows. On February 25, daily net outflows reached $1.14 billion, with a 6-day consecutive outflow from February 18 to February 25. From February 10 to February 13, there was a 4-day continuous outflow period, with 3 of those days seeing outflows exceeding $150 million.

Regarding Ethereum spot ETFs, recent performance has also been far from optimistic. Data shows that from February 20 to 25, there have been 4 consecutive days of net outflows, with a $3 billion net inflow on February 4, which, however, had little support on price.
Spot ETF data clearly indicates that current market participants hold a pessimistic view on future coin prices.
Elusive Rate Cut
U.S. macro data and Fed policy still have a significant impact on the crypto market. The market currently anticipates no rate cut by the Fed in March, so is there still room for rate cuts in the future?
Fed's Bostic stated that he expects two rate cuts this year, but in the backdrop of "ubiquitous" uncertainty, more or fewer cuts could happen. He expects that inflation will not suddenly spike, with his overall inflation expectation being a bumpy downward path. He believes that inflation will move toward the 2% target but is not there yet. The Fed's goal is to reach a 2.0% target without impairing the labor market.
Bostic mentioned that businesses are optimistic about deregulation but are concerned about the impact of tariff and immigration policy changes. Additionally, he thinks there are signs of easing in the labor market. Bostic stated that the current benchmark interest rate is moderately restrictive and needs to remain so. He said that due to upcoming policy shifts, a slowdown in the economy is a major concern, but businesses expect robust growth by 2025.
On February 26, the secured overnight financing rate options market anticipated two rate cuts by the Fed by June, with a potential rate cut space of around 50 basis points.
Subsequent Market Trends
Matrixport released a chart titled
Wall Street has become a key player in Bitcoin, with Bitcoin's 60% market dominance still a crucial benchmark for the crypto market, and institutional trading behavior increasingly influencing its price trends. Concerns about Trump's proposed tariffs and a six-month delay in the Bitcoin strategic reserve plan may be one of the reasons for the current chart showing a technical top formation. From a technical analysis perspective, Bitcoin may retrace to the recent support level of $73,000.
CryptoQuant CEO Ki Young Ju stated, "If you panic sell now, you might be a newbie. In a Bitcoin bull market cycle, a 30% pullback is quite common: in 2021, Bitcoin saw a drop of 53%, but still recovered and hit a new all-time high."
Bitwise Europe Research Director Andre Dragosch pointed out that the crypto asset sentiment index has reached its lowest level since August, coinciding with a yen carry trade liquidation, which led Bitcoin to bottom around $49,000 in August. The crypto asset sentiment index shows a significant contra-trade signal. General pessimism in liquidity, on-chain data, and the derivatives market indicates relatively limited downside risks. At these price levels, the risk-reward outlook appears quite favorable.
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