Bitcoin News Today: Trade War Rhetoric Plunges Crypto Fear Index to 6-Month Low, Spurring Contrarian Bets

The crypto Fear & Greed Index fell to 27 on October 11, 2025, marking the lowest level in nearly six months amid heightened trade tensions triggered by U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports . The index, which gauges market sentiment on a scale from 0 (Extreme Fear) to 100 (Extreme Greed), had surged to 71 just days earlier following Bitcoin's record highs of $125,100. The abrupt shift to "Fear" territory coincided with Bitcoin's intraday dip to $102,000 and over $19.27 billion in liquidations of long and short positions across the crypto market, according to Coinglass data .

The sell-off was driven by renewed U.S.-China trade war rhetoric, with Trump's tariff threat exacerbating market volatility. The last time the index reached a similar level-April 16, 2025-Bitcoin had plummeted to $77,000 amid similar trade uncertainty . Analysts noted that the current drop could signal a contrarian buying opportunity, particularly as Bitwise's intraday crypto asset Sentiment Index reached -2.8 standard deviations, its lowest level since the "Yen Carry Trade Unwind" in summer 2024 . Andre Dragosch, Bitwise's European head of research, described this as a "strong contrarian buying signal," suggesting institutional flows had entered oversold territory .

Bitcoin's price action underscored the market's fragility. Over 24 hours, the asset fell from $125,100 to $102,000, with Ethereum (ETH) and altcoins like XRP and Solana (SOL) suffering even steeper declines of 15–49% . Hyperliquid, a major perpetual exchange, recorded the largest single liquidation of $11.61 million in the BTC/USD pair . The broader market capitalization of cryptocurrencies dropped from an all-time high of $4.27 trillion to $3.26 trillion, erasing $1 trillion in value .

Societal sentiment also diverged from previous bullish cycles. Santiment analyst Brian Quinlivan observed muted reactions on social media to Bitcoin's recent highs, noting that the current euphoria paled in comparison to past all-time highs . This lack of retail-driven hype could indicate reduced speculative fervor, potentially limiting downside risks but also slowing momentum.

Historical parallels further contextualize the current environment. In April 2025, the index's prior "Fear" reading coincided with a 37-point drop in sentiment, followed by a gradual recovery. The current scenario, however, faces additional headwinds as Trump's tariff announcement precedes China's tightening of rare earth export controls, escalating global economic uncertainty .

Institutional analysts remain cautiously optimistic. The CMC Fear & Greed Index, which incorporates volatility, derivatives data, and social trends, aligns with the broader market's fear-driven sentiment . However, contrarian indicators like Bitwise's -2.8 deviation and the index's historical performance during similar events suggest potential for a rebound, though risks remain elevated .