Fear Index Re-enters ‘5’ on Bitcoin Plunge…Mixed Signals on a Bottom Amid Massive Liquidations

Bitcoin (BTC) tumbled more than 4% in a single day, sliding to around $64,300, sending the crypto fear-and-greed index back down to historically low levels.

According to CoinGlass data cited by Cointelegraph on the 22nd (local time), more than 136,000 traders were liquidated over the past 24 hours, with total liquidations reaching about $458 million. Of that, 92% came from leveraged long positions, suggesting excessive leverage was rapidly flushed out during the downturn.

Bitcoin is currently down about 48% from its all-time high of $126,000 set in October last year, and more than 5% below the $69,000 peak of the 2021 bull market.

Market sentiment has returned to extreme fear territory. Alternative’s Fear & Greed Index registered 5, entering the “Extreme Fear” stage. The index has fallen to this level only three times, including August 2019, June 2022 and earlier this month.

On-chain indicators also point to continued pressure. According to Glassnode, the seven-day average of investors’ net realized losses remains around $500 million per day, indicating ongoing capitulation. However, the intensity of losses has eased somewhat.

Meanwhile, some technical indicators suggest a potential long-term accumulation phase. Analyst Michaël van de Poppe said Bitcoin’s Sharpe ratio fell to –38.4, a level that has historically resembled a low-risk accumulation zone. The metric, which measures risk-adjusted returns relative to volatility, has previously posted extreme readings near major market bottoms.