A clear change in sentiment has taken hold in crypto assets following a week of selling, weaker macroeconomic signals and reduced liquidity. Markets are now adopting a cautious stance, with fear mounting as large-cap tokens like Bitcoin retreat to multi-month lows.
In brief
- Bitcoin falls to $96K as extreme fear grips markets, with major tokens sliding and sentiment turning sharply bearish.
- Analysts cite profit-taking, low liquidity, and macro uncertainty as key factors behind this widespread crypto weakness.
- Chances of a Fed rate cut near 50% and delayed economic data add uncertainty, reducing conviction among crypto traders.
- Some investors see the pullback as a healthy reset, with stable selling pressure suggesting controlled market digestion.
Crypto market weakens on all fronts as Bitcoin slides to $96K
Crypto sentiment deteriorated markedly, with the Fear & Greed Index falling to 10, a level considered “extreme fear” and the lowest reading since late February. Investors are reacting to continued losses in major tokens, including Bitcoin's slide to just below $96,000. This is the second time this month that Bitcoin has fallen below the $100,000 threshold.
Bitcoin slipped more than 5% last week and is now trading at $96,436, a level last seen in early March. Traders note that Bitcoin has been outperformed by 65% of the top 100 crypto assets over the past year and is now trading below its 200-day simple moving average. Market sentiment around Bitcoin remains clearly bearish, in line with the latest Fear Index reading.
Ethereum shows a similar pattern, trading at $3,236 after posting losses for the month, week and day. Broader market weakness is also evident in the CoinDesk 20 Index, which fell about 5.8% for the week.
Long-term holders reduce their positions ahead of new macro signals
Analysts attribute the current decline to several combined pressures. Jake Kennis, senior research analyst at Nansen, cited profit-taking by long-term holders, institutional outflows, macroeconomic uncertainty and liquidations of leveraged positions.
The selling is a mix of profit-taking by long-term holders, institutional exits, macro uncertainty and liquidated leveraged long positions. What is clear is that the market has temporarily chosen a downward direction after a long period of consolidation/ranges.
Jake Kennis
Midweek trading reflected a growing set of concerns:
- Profit taking increased after Bitcoin's latest failure to regain the $100,000 threshold.
- Institutional flows have weakened amid continued uncertainty around interest rates.
- Liquidity remained low on major platforms following the October crash.
- Traders reacted to declining odds of a rate cut by the Federal Reserve in the near term.
- THE delayed economic data from the White House added to market uncertainty.
Rate expectations have shifted, with CME's FedWatch tool now placing the odds of a 25 basis point cut at around 50%. At the same time, prediction markets like Kalshi and Polymarket show similar probabilities. With several key economic indicators potentially delayed due to the recent government shutdown, traders have fewer macroeconomic signals to guide their positioning.
Liquidity issues remain a major factor, with order book depths yet to recover from the October crash. Lower liquidity can amplify market fluctuations, making it more difficult for buyers and sellers to transact without abrupt price adjustments.
Not all sentiment is negative, however, with some traders seeing the recent pullback as a necessary reset after months of sideways action. They say stabilizing volumes and continued selling pressure are signs that the market is absorbing declines rather than capitulating. Several technical levels continue to hold, and larger holders appear to be waiting for confirmation before entering new positions.
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