Fear and Greed Index: Dropped to 10 (Extreme Fear), 2018 Bear Market Level

1. The Federal Reserve's interest rate cut expectations collapse

The likelihood of a rate cut in December has dropped from nearly 100% to below 50%. With persistent inflation in the U.S. and strong employment data, Fed officials continue to adopt a hawkish stance. In a high-interest rate environment, all high-risk assets (tech stocks + cryptocurrencies) are being sold off, and BTC/ETH are essentially the "high Beta version of Nasdaq."

Nasdaq rose by 1% → BTC/ETH average rose by 3~4%

The Nasdaq 100 index has fallen about 6~8% from its high in November.

Bitcoin dropped from 126,000 to 91,000 → a decline of about 28% (about 4 times that of Nasdaq)

2. Large Outflow of Bitcoin/Ethereum Spot ETFs

Since November, the U.S. BTC ETF has seen continuous net outflows (with a single-week peak of nearly $1 billion), as institutions take profits and seek safety, directly withdrawing market liquidity. The Ether ETF is facing similar difficulties. The ETF was originally the driving force that pushed BTC to $126,000 this year, but has now turned into a "cash machine."

3. High Leverage Liquidation Waterfall

After accumulating too much long leverage after the peak in October, breaking below the psychological levels of 100,000, 95,000, and 90,000, the chain liquidation exceeded 1 billion USD, amplifying the decline. Altcoins fared even worse, with SOL, XRP, DOGE and others dropping by 10-20%.

4. Concerns about AI/tech stock bubble spillover

Nvidia's earnings report leads to a decline in tech stocks (Nasdaq suffers continuous losses), and the correlation between the crypto market and tech stocks is as high as 0.9. They are being sold off together. The market is now treating BTC as the "purest risk asset" to sell.

5. Year-end liquidity seasonality tightening + macro uncertainty

The aftermath of the U.S. government shutdown, uncertainty over Trump's trade tariffs, and poor economic data from China have tightened global dollar liquidity, with risk assets being the first to suffer.