Crypto Fear Index Hits Historic 28 Low: Is COVID-Like Crash Repeating?

The Crypto Fear Index has dropped to 28, shocking everyone in the industry. This shows that investors in the market are feeling scared and uncertain.

The last time it dropped this low was during the Crypto COVID crash. Many investors are asking if we are about to see another big drop in prices, like we did back in 2020.

In this article, we’ll look at why the market is so afraid right now, what’s causing it, and what might happen next.

Crypto Fear Index at Historic Lows: What Does It Mean for Investors?

The Crypto Fear and Greed Index is a tool that helps understand investor sentiment circulating in the industry, ranging from fear (below 50) to greed (above 50). Here's what the chart highlights:

Source: Coin Bureau X Account

• COVID (early 2020): The chart dropped a lot, showing that people were very scared as the market crashed during the pandemic.

• China's Ban: When China banned cryptocurrency, the index fell again, showing even more fear in the market.

• 5x Price Increase: As prices shot up, the index rose sharply, showing that investors were feeling greedy and excited.

Right now, the chart represents the crypto fear index at 28 , which is extremely low, creating panic in the marketplace.

The last time it was below 10 was during the COVID crash, meaning the history may repeat just like it did in 2020 if no positive news comes soon.

Why Is The Cryptocurrency Market in Fear Today? Possible Reasons

Here are four reasons why people are feeling so afraid right now:

1. $22,000,000,000 Options Expiring Today: This creates a lot of uncertainty, as big investors might sell or buy to adjust their positions.

2. Trump’s Tariff Announcement: As per The Kobeissi Letter’s X post, President Trump announced that he would increase tariffs on several products including 100% tariffs on pharmaceuticals, 50% on furniture, and more, all set to go live by October 1st.  This made investors nervous because it could hurt the global economy, and in turn, the crypto market crash .

3. Fed Rate Cut Rumors: President Trump has also said he wants the Federal Reserve to lower interest rates to 2%. This is creating worry about what might happen to the economy, risking investments.

4. $1.19 Billion in Crypto Liquidations : In the last 24 hours, $1.19 billion worth of assets has been liquidated, adding to the concern in the market today.

Source: CoinGlass Data

These four things have caused many people to pull their money out, driving the Fear Index down even further.

COVID Crash vs. Current Cryptocurrency Crash: Is History Repeating?

If we look back at the COVID crash in 2020, there’s something similar happening now. Back then, the sentiment index dropped to 10, and BTC and ETh crashed, along with other altcoins.

The similar Crypto bearish pattern is repeating right now. The altcoin market cap is struggling to break through a key resistance level. This means that assets like Ethereum, Solana, BNB, and more are not showing any rebound momentum.

Without growth in altcoins, the marketplace stays in caution. On the other hand, Bitcoin price struggles at $$109, as it dropped by 6% recently, and Ethereum has dropped by 15%.

This significant BTC and ETH drop clearly answers why market is down today, leaving top analysts believe the situation is similar to one of the largest crashes they have seen in 2020.

Conclusion: Is This Buy Signal or Cautious Flag?

When the Crypto Fear Index is low, it might be a good time to buy for booking high profits. But, since the industry is so scared right now, some more drops are being anticipated before a major breakout.

Altcoin might be coming if bitcoin keeps struggling. So if you’re thinking about buying cryptocurrencies right now, be careful and only invest after careful research and expert advice to avoid high risk at this time.