The cryptocurrency market’s Fear & Greed Index sharply turned “fear” this week, dropping to levels last seen in April as the market crash wiped out more than $230 billion in a single day.
On Friday, CoinMarketCap’s Crypto Fear & Greed Index, which tracks volatility, market momentum, social media trends, and dominance metrics, fell to a low of 28, which is in the “fear” category and inching closer to “extreme fear.”
Cryptocurrency market capitalization was around $3.54 trillion on Friday, down 6% from $3.78 trillion the previous day, according to data from CoinMarketCap. This wiped out more than $230 billion in value for the sector, one of the steepest single-day declines in months.
U.S. stocks closed lower on Thursday as turmoil in credit markets, local banks’ non-performing loan exposures and U.S.-China trade tensions spread uncertainty on Wall Street, with the traditional assets Fear & Greed Index also falling to 22, indicating extreme fear in the market.
Outflows of top-class crypto assets continue
Data shows that major crypto assets have widened their decline in the past 24 hours as the overall market correction deepens.
Bitcoin (BTC) fell about 6% to about $105,000, and Ether (ETH) fell about 8% to about $3,700. Among large altcoins, BNB (BNB) led the losses with a drop of about 12%, followed by Chainlink (LINK) with a drop of 11% and Cardano (ADA) with a drop of 9%.
Solana (SOL) and XRP (XRP) also fell more than 7%, extending their week-long losses and erasing the double-digit gains they had racked up earlier this month.
On average, the largest non-stablecoin crypto asset has declined by around 8% to 9% in the past 24 hours.
Last week’s market crash led to nearly $20 billion in liquidations, but this week’s economic downturn has sharply reduced trading.
On Friday, around $556 million worth of leveraged positions were wiped out across exchanges, according to Coinglass data, but this is just a fraction of last week’s numbers.
Of this amount, approximately $451 million arose from long positions and $105 million arose from short liquidations.
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NFTs, meme coins, and ETFs react to market decline
Apart from major cryptocurrencies, other assets such as meme coins, non-fungible tokens (NFTs), and exchange-traded funds (ETFs) were also affected by the recent selloff.
The meme coin, which showed some signs of recovery this week, fell 33% in 24 hours, according to CoinMarketCap. Although the top memecoin assets experienced declines of 9% to 11% over the past 24 hours, trading volumes remained relatively high, reaching nearly $10 billion.
The NFT sector also recovered from last week’s $1.2 billion disappearance, but that gain was erased, leaving valuations below $5 billion, the level last seen in July. According to CoinGecko data, the majority of the collection of blue-chip stocks declined by double-digit percentages in the past 24 hours.
Meanwhile, Spot Bitcoin and Ether ETFs reacted to the selloff. On Thursday, the Spot Bitcoin ETF recorded over $536 million in outflows, and the Spot Ether ETF recorded daily net outflows of over $56 million.
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