Extreme Fear Index (24) Hits Record Lows as Market Sentiment Deteriorates

The Crypto Fear & Greed Index has fallen to extreme fear levels (reading 8) as of February 25, 2026, reflecting heightened volatility, negative sentiment, and increased Bitcoin dominance according to MEXC.

Bitcoin dropped to $62,700 amid this selloff, driven by macroeconomic concerns, ETF outflows, and weak demand in crypto markets, with a Fear & Greed Index reading of 5 also indicating extreme fear as reported by BitBo.

The market-wide fear extends beyond crypto, with gold, stocks, and other assets also suffering losses, as the index hit 9 in another reading, reinforcing a pervasive sentiment of panic according to Yahoo Finance.

The broader market capitalization currently stands at $2.25 trillion, with critical support levels identified between $60,000 and $63,000 as noted by BitBo.

Investor sentiment is not limited to crypto; global markets, including the Nasdaq 100 and the FTSE 100, are also being affected by macroeconomic fears, particularly around AI investment and trade policies. These factors are contributing to increased volatility across multiple asset classes according to CNBC.

What Drives the Extreme Fear Sentiment?

Market volatility is influenced by global macroeconomic factors, AI-related fears, and trade uncertainties. The Nasdaq 100 remains at the same price as October 2025 despite the volatility, and key financial ratios, such as the Vanguard Growth/Value ratio, are being closely watched as they test pivot zones as CNBC reports.

The Flow Fear and Greed Index, which incorporates indicators like price trends, volatility, volume, impulse, and social media sentiment, helps quantify market sentiment. It currently suggests an environment of extreme fear, with buying pressure near the current price indicating bearish sentiment according to CFGI.

What Are the Risks and Limitations?

While extreme fear readings have historically preceded market recoveries, they should not be relied upon as precise timing tools. The current market selloff appears to be a leverage flush rather than full capitulation, and further declines could extend into the mid-$50,000s if support levels fail as BitBo reports.

The broader economic implications of AI fears and trade policies could extend into employment and consumer spending patterns, raising concerns about systemic vulnerabilities. These factors are affecting not only technology and finance but also sectors like consumer goods and payment services according to Proactive Investors.

What Should Investors Consider Now?

Investors are advised to consider the emotional state of the market when making decisions. Extreme fear readings suggest potential contrarian investment opportunities, but they should be used alongside other analytical tools to mitigate risk.

The current environment also highlights the sustainability challenges of growth-dependent financial systems, with critics pointing to the environmental and resource depletion risks of relying on traditional investment vehicles like 401(k)s and index funds as Reddit users note.

Overall, the extreme fear sentiment indicates a market in distress but also presents potential opportunities for those prepared to navigate the uncertainty with a long-term perspective and robust risk management strategies.