Bitcoin’s significant pullback on Monday sent a ripple effect throughout cryptocurrency markets, dampening sentiment to levels that haven’t been observed in several months. The leading cryptocurrency briefly tumbled to a 24-hour low of $103,938 after trading above $109,000 earlier in the day. This sharp decline triggered negative market sentiment as investors began to reassess their risk exposure.
The Crypto Fear & Greed Index, which gauges market sentiment, plummeted to a score of 21 out of 100, signaling “Extreme Fear.” This reading marked the index’s lowest point in nearly seven months; the last time it was this low was on April 9, when market reactions were tied to US President Donald Trump’s imposition of global tariffs. The index has seen significant swings between calm and heightened fear since a large sell-off earlier this month, which followed a price peak above $126,000 on October 6.
Market analysts highlighted a combination of weak institutional flows and macroeconomic worries as contributing factors to the downturn. Reports indicated that Bitcoin-linked exchange-traded funds (ETFs) experienced net outflows totaling nearly $800 million in the past week. Notably, institutional buying has recently fallen below the amount of newly mined Bitcoin for the first time in seven months. This trend is concerning, as it diminishes the steady inflow that has historically helped to support prices.
While Bitcoin briefly recovered above the $104,100 mark after the initial drop, the day’s significant price swings underscored the fragile nature of market conditions. Some traders pointed to reduced activity on exchanges and wallets as a cause for concern, while others cited apprehensions regarding the Federal Reserve’s monetary policy stance.
The Federal Reserve had cut interest rates for the second time this year on Wednesday but also indicated that additional cuts might not occur until 2025, which took investors by surprise. This unexpected shift in guidance led to a rapid re-pricing in both stock and cryptocurrency markets.
Technically, the Crypto Fear & Greed Index had last fallen into the “Extreme Fear” category on October 21, when it registered at 25 after Bitcoin’s slide from over $110,000 to below $108,000. Before this downturn, the index had reached above 70—an indication of “Greed”—highlighting how swiftly market sentiment can pivot in response to price movements.
Looking ahead, traders are keeping a close eye on ETF flows, on-chain activity, and new signals from US policymakers. Reports have cited declining blockchain activity and diminished large purchases by institutions as immediate reasons for the downturn. If inflows begin to stabilize, they could help mitigate ongoing market pressure. Conversely, if outflows continue, the situation may worsen.
Despite current challenges, some market bulls are holding onto historical trends, noting that November has historically been a beneficial month for Bitcoin, with average gains exceeding 40% in previous years.
