Investor Sentiment Hit 3-Year Low of ‘Extreme Fear’ Below FTX Implosion

• Analysts had mixed views on BTC’s next price direction.

On February 26th, investor sentiment dropped below post-FTX levels as Bitcoin (BTC) extended its losses to $82K.

The crypto fear and greed index fell to a 3-year low of 10, the worst sentiment since the ‘extreme fear’ level of 22 observed during the FTX collapse in 2022.

This risk-off sentiment led to a withdrawal of $1B from BTC ETFs on Wednesday, totaling $1.8B for the week, according to Bloomberg ETF analyst Eric Balchunas.

Trump Dumps Markets

According to crypto options trading desk QCP Capital, the further plunge was fueled by President Trump’s announcement of a 25% tariff on the European Union and rising inflation fears. Part of their daily market update stated:

> “Equities, gold, & BTC are sliding as stagflation fears gain traction. Consumer sentiment is weakening (CCI missed: 98 vs. 103), while inflation expectations remain high. Markets are reacting with caution.”

Analysts warned that the tariffs would likely raise inflation and impact the prices of goods.

On Tuesday, BTC dropped below $90K after President Trump indicated that 25% tariffs on Canada and Mexico would take effect on March 3rd.

Persistent inflation could affect the Fed’s rate cut outlook, with QCP Capital suggesting that the upcoming PCE inflation print could provide insight into BTC’s future direction.

Conversely, some analysts, like Ken Teng (Chicken Genius), argued that the extreme fear in the market might indicate a potential bottom for BTC, allowing for a rebound given that it has not yet reached its peak.

> “Clear indication of bottom; cycle tops out far from here, and it’s the final phase I’m most looking forward to.”

BTC trader Cryp Nuevo also speculated that BTC could drop to the confluence area of the CME gap and weekly moving average at $77K-$78K, areas that tend to see price imbalances filled over time.

At press time, BTC had bounced 5% from its low of $82.2K, now valued at $86.5K. The future of the king coin, whether it can reclaim the range-lows above $90K or decline further towards $77K, is still uncertain.