Crypto markets opened in a more somber mood on Friday as the Crypto Fear and Greed Index slipped to 16, back into “Extreme Fear” territory and down from 26 a day earlier.
The indicator last printed 16 on December 19, 2025, suggesting sentiment has fallen to its lowest level in a month.
Bitcoin fell about 7% to around $82,000 as traders digested new US political noise, including reports that President Donald Trump would nominate former Federal Reserve member Kevin Warsh to replace current Fed Chairman Jerome Powell.
Trump said Thursday evening that he would name his nominee Friday morning, a day after lambasting Powell and the Fed for not choosing to cut rates.
The liquidation also forced a broad unwinding of leveraged positions. Data from CoinGlass showed $1.80 billion in liquidations over the past 24 hours, dominated by long positions at $1.68 billion versus $117.30 million in short positions, with 280,430 traders wiped out in total.
Linh Tran, senior market analyst at XS.com, said Bitcoin faces direct competition from traditional defensive assets, including gold.
“As geopolitical uncertainty and policy risks intensify, markets tend to favor assets with a long-standing role in risk hedging,” she said.
“This precious metal has posted a string of strong consecutive gains and recently hit a new all-time high around $5,600/ounce. Meanwhile, Bitcoin is still largely classified as a high-risk asset in most institutional investors’ asset allocation frameworks.”
Meanwhile, CoinSwitch’s markets desk said leverage could stabilize the band in the near term if spot demand continues.
“However, a decisive break below $82,000 could expose between $79,000 and $80,000, while a sustained rise requires acceptance above $88,500, supported by improving spot demand and ETF flows,” they said.
Kraken global economist Thomas Perfumo said Bitcoin’s lag behind precious metals had tested investors’ patience.
“At first glance, the macroeconomic backdrop is favorable: falling interest rates and rising geopolitical uncertainty historically favor an asset seen as a hedge against currency depreciation and political instability,” he said.
“But despite the rate cuts, global liquidity remains the most influential factor in crypto market performance, underscoring that interest rates are only one component of overall liquidity conditions. In contrast, gold historically benefits from a weakening U.S. dollar.”
Read original story Crypto market mood weakens with fear index at lowest level since December by Shalini Nagarajan on Cryptonews.com
