Cryptocurrency market fear index drops to 26, intertwining liquidation risk and emotional distress

Cryptocurrency Fear & Greed Index drops to 26, indicating the market has entered an extreme fear state. According to the latest news, the index has decreased by 3 points from yesterday, with a 7-day average of 32 and a 30-day average of 24. Under the dual pressures of liquidation risk and macro uncertainty, market sentiment has bottomed out, and both bulls and bears are facing significant leverage pressure.

The Market Panic Behind the Index

The Fear & Greed Index is an important indicator of market sentiment, ranging from 0 to 100. A lower value indicates greater fear, while a higher value indicates greed. The current 26 falls into the extreme fear zone, suggesting market participants are engaging in large-scale selling or waiting on the sidelines.

In comparison, the 30-day average is 24. Although the current 26 is slightly above the 30-day average, it remains at a historical low. This indicates that recent market sentiment has somewhat eased (7-day average of 32), but the overall panic tone has not changed.

Key Factors Triggering Panic

Technical Pressure

According to related news, Bitcoin continued its correction on January 8, breaking below support levels of $92,000 and $91,000, and briefly falling below the important psychological threshold of $90,000. Ethereum also fluctuated around $3,230. While analysts see this technical correction as a reset of the New Year’s rally, breaking below key support levels has indeed intensified market panic.

Macro Hedging Sentiment

Rising geopolitical risks and the upcoming release of US non-farm payroll data have led to a decline in risk asset appetite. Such macro uncertainties often trigger a sell-off in the crypto market.

Escalating Liquidation Risks

Liquidation data reveal market fragility. If Bitcoin falls below $87,099, the total liquidation of long positions on major exchanges could reach $1.87 billion. If Ethereum drops below $3,000, long liquidation could reach $902 million. This means that near critical price levels, any small movement could trigger a chain reaction of liquidations.

The past 24 hours’ liquidation data is even more alarming: total liquidations amount to $454 million, with $406 million from long positions, involving 132,779 traders being liquidated.

Current Market Situation: Bulls and Bears on the Edge

The Bulls’ Critical Threshold

• If BTC drops below $87,099, bullish liquidation strength reaches $1.87 billion
• If ETH drops below $3,000, bullish liquidation strength reaches $902 million

These key levels act like a “sword of Damocles” hanging over bulls; once prices touch, large-scale forced liquidations could occur.

The Bears’ Defensive Line

• If BTC breaks above $95,649, bearish liquidation strength reaches $2.53 billion
• If ETH breaks above $3,300, bearish liquidation strength reaches $809 million

Bears are also in danger; a rebound above key resistance levels could trigger significant liquidations.

Short-term Market Outlook

Based on current data, the market is in a typical “stalemate” state. The extremely low fear index suggests selling pressure may have largely eased, but the market awaits macroeconomic signals to determine direction.

Key points to watch:

• Support at $90,000 for BTC — a critical level to gauge short-term strength or weakness
• Release of US non-farm payroll data — could be a turning point
• Coinbase Bitcoin premium index — signals capital flow in the US market

Summary

The Crypto Fear & Greed Index dropping to 26 reflects not only low sentiment but also structural market fragility. With concentrated liquidation risks and both sides under pressure, the market is waiting for a clear directional signal. In the short term, the gains or losses at key support levels will determine the subsequent trend, while macro factors could change the game at any moment. For participants, the most important thing now is risk management rather than chasing profits.