Bitcoin experienced a sharp decline, shedding over $3,000 in just two hours, pushing the Crypto Fear and Greed Index back to historic lows. The cryptocurrency fell more than 4% on Monday, dropping to $64,300 and erasing its gains from Friday.
Over the past 24 hours, more than 136,000 traders saw liquidations totaling $458 million, with 92% of those being leveraged long positions. Bitcoin had reached $68,600 on Saturday but has now fallen back to support levels within a range that formed after a previous dip to $60,000.
The Crypto Fear and Greed Index, which measures market sentiment, has fallen to 5 out of 100, signaling "extreme fear." This level has been reached only a few times since the index's inception in 2018.
On-chain analytics indicate that recent investors are still experiencing significant losses, with seven-day moving average net realized losses for this group nearing $500 million daily. This suggests a market under pressure as participants remain in a capitulation phase.
Separately, the Bitcoin Sharpe Ratio has dropped to -38.4. This metric, which assesses risk-adjusted returns, historically indicates 'low risk' accumulation zones when it reaches such lows. The ratio has only been lower twice in Bitcoin's history.