The sharp decline is driven by growing uncertainty over U.S. monetary policies.
The Fear & Greed Index, which gauges sentiment among cryptocurrency traders, fell sharply to a very low level of just 10 points.
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This level, recorded on Sunday, indicates a state of “extreme fear” dominating investor psychology.
The drop reflects pessimism not seen since February 2025, when the index hit the same bottom. The deterioration in sentiment comes amid a wave of steep declines that have swept through crypto assets in recent days.
Federal pessimism dampens expectations
The drop is largely due to rising uncertainty about U.S. monetary policy.
It follows pessimistic statements from several Federal Reserve officials regarding the upcoming December meeting.
According to the CME FedWatch tool, traders currently price in less than a 50% chance of a 0.25 percentage point rate cut at the upcoming meeting.
This marks a sharp decline compared with 62.9% earlier this week and 95.5% just one month ago, highlighting the magnitude of the shift in market expectations.
Bitcoin erases full-year gains
In terms of price performance, Bitcoin is currently trading below $94,000. This erases its gains for all of 2025, after notable increases of 157% in 2023 and 120% in 2024.
These developments reflect deep uncertainty over the future trajectory of the cryptocurrency market, with traders closely watching Federal Reserve decisions and their potential impact on risk appetite in highly volatile assets.
