The fear and greed index, which measures investor sentiment in the cryptocurrency markets, has fallen to 5 points, its lowest level in the index’s history. This data indicates a significant deterioration in market psychology in recent months.
The index, measured between 0 and 100, combines various indicators such as volatility, market momentum, social media activity, Bitcoin dominance, and search trends to produce a single sentiment score. Values closer to 0 represent “extreme fear.”
According to the analysis, a significant portion of the decline extending into the fear zone is based on the events of October 10, 2025, referred to as “10/10” in the industry. On that day, the largest liquidation wave in crypto history occurred; over $19 billion in leveraged positions across more than 1.6 million accounts were forced to close within 24 hours. While Bitcoin fell by approximately 14%, losses in altcoins were much sharper.
This process exposed structural vulnerabilities in derivatives markets, such as thin liquidity, excessive leverage, cross-margin risks, and exchange infrastructure strained under pressure. Since then, there has been no lasting recovery in sentiment.
The current level is also noteworthy because it contrasts with ongoing developments on the institutional side. BlackRock, Citadel, and other traditional finance giants are reportedly continuing their work in DeFi and tokenization, with projects to bring real-world assets (RWA) onto the blockchain progressing.
Experts point out that while retail investors are acting on short-term fears, institutions are positioning themselves with a longer-term perspective.
