The crypto market has plunged back into a state of “Extreme Fear” following a steep drop in investor sentiment.
The widely watched Crypto Fear and Greed Index fell 19 points to 25 on Tuesday, marking one of its lowest readings in recent months.
The sharp decline in sentiment came in the wake of former U.S. President Donald Trump’s April 2 announcement of sweeping new tariffs, branded the “Liberation Day” plan.
Trump’s Tariff Plan Imposes 10% Baseline, Hits Select Countries Harder
The policy introduces a 10% baseline tariff on all imports and includes significantly higher rates for selected countries.
China faces the steepest hike, with a combined 54% duty, while Vietnam (46%), Taiwan (32%), India (26%), Japan (24%), and the European Union (20%) also face sharp increases.
Canada and Mexico have been exempted for now, though that could change if existing tariffs are withdrawn.
Markets reacted swiftly and negatively. U.S. stock futures plummeted, with the Dow dropping over 1,000 points, while the S&P 500 and Nasdaq also suffered major losses.
The crypto sector mirrored the downturn. The overall crypto market capitalization fell by 4% to $2.7 trillion.
Bitcoin initially rallied to $88,500 during Trump’s speech but quickly reversed course, falling to $83,073—a 2% loss within 24 hours.
Ethereum followed with a 4% decline to $1,816, while Solana dropped more than 5% to $119.
The market rout triggered $514 million in liquidations over a 24-hour span, with $290 million coming from long positions, according to data from Coinglass.
Notably, the CMC Altcoin Season Index chart shows that the current score is 14 out of 100, placing the market firmly in Bitcoin Season rather than Altcoin Season.
This score indicates that only a small number of altcoins have outperformed Bitcoin over the last 90 days.
Historically, when this index is below 25, it suggests that Bitcoin is dominating the market in terms of returns, while altcoins are underperforming.
The chart also shows a steady decline in the Altcoin Season Index since January, with the current reading near its 90-day low.
In the broader context of the Fear and Greed Index, which also sits at a low 24/100 (Extreme Fear), the current Altcoin Season Index further reflects market caution.
Investors appear to be retreating to perceived safer assets like Bitcoin during uncertain times, avoiding riskier altcoins.
Arthur Hayes: Bitcoin Must Hold $76.5K Until Tax Day to Stay Bullish
Arthur Hayes, co-founder of crypto exchange BitMEX, addressed the volatility on X, suggesting that Bitcoin holding above $76,500 until April 15—U.S. tax day—would be a bullish sign.
He cautioned traders not to “get chopped up” by the current turbulence.
Last month, 10X Research warned that Bitcoin could revisit $73,000.
The firm noted retail investors flocked to meme coins during Bitcoin’s post-election rally in January, likely marking a market top. They suggested Bitcoin now needs a new catalyst to sustain upward momentum.
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