Crypto Market Panic Deepens as Fear & Greed Index Hits A Low of 5

• Crypto market panic deepened as the total market cap fell to $2.24T in 24 hours.
• The Fear & Greed Index hits 5, signaling extreme market panic.
• Macro shocks, tariffs, Iran tensions, ETF outflows, and long liquidations spiked fear.

The crypto market panic reached extreme levels on Monday, February 23, 2026, as the rout intensified. The total crypto market cap fell by 4% in 24 hours, dropping from $2.33T to $2.24T. The macroeconomic shocks drove today’s crypto market selloff, including geopolitical instability, negative Bitcoin Exchange Traded Funds (ETF) flows, and heavy long liquidations. 

Crypto Market Panic Explodes as Sentiment Crashes to Extreme Fear 

Crypto market sentiment has collapsed into extreme fear, with the Fear & Greed Index plunging to 5, a level rarely seen outside major capitulation events. This signals widespread forced selling, rapid deleveraging, and investors prioritizing capital preservation over risk. 

Historically, such depressed sentiment aligns with peak panic, where fear, not fundamentals, drives downside momentum.

What are the Causes of Extreme Crypto Fear? 

A major driver behind the current wave of fear is the ongoing debate over Bitcoin’s role as a store of value compared to gold. Critics argue that Bitcoin remains too volatile and speculative, especially during macro uncertainty, while supporters see this phase as a natural stage in its evolution. 

Unlike gold, which has centuries of trust and stability, Bitcoin is still transitioning from a speculative asset into a globally accepted store of value.

“People are realizing that Bitcoin is what it’s always been – which is simply a speculative asset. Bitcoin is not replacing gold, it’s not digital gold, it doesn’t do the same thing, it doesn’t give people the same utility that gold does. It’s not an inflation hedge – there are other better hedges, frankly, where you don’t have to worry about the volatility. And it’s not a chaos hedge either,” Tom Essaye, president and founder of Sevens Report, stated.

Macro developments have also heightened uncertainty in the crypto market. For instance, President Donald Trump’s tariff policies, which have risen from 10% to 15%, have sparked concerns about global trade stability and economic direction. 

The extreme crypto fear has also been amplified by stress in the derivatives market, where recent CoinGlass data show that total crypto liquidations reached roughly $480.6 million in 24 hours, with long positions accounting for about $434.2 million of the forced closures.

What’s Next For the Crypto Market?

The crypto market remains heavily undervalued compared to other financial instruments. With investors sitting on record cash reserves, even a modest shift in macro sentiment could trigger renewed demand for crypto assets. For instance, the crypto community is awaiting the passage and enactment of the CLARITY Act to trigger crypto bullish sentiments.

Meanwhile, the crypto market is well-positioned to mirror growth in Gold and Silver. Notably, Gold has already overtaken the U.S. Dollar as the top global reserve. 

Related: Crypto Rout Deepens Amid Extreme Fear of More Selloff: What’s Next?