The crypto market has slipped back into a state of “Extreme Fear” following a significant drop in investor sentiment. The widely monitored Crypto Fear and Greed Index fell 19 points to 25, marking one of its lowest levels in recent months. This sharp decline followed former U.S. President Donald Trump’s announcement of sweeping new tariffs on April 2, called the “Liberation Day” plan.
Trump’s tariff policy introduces a 10% baseline tariff on all imports, with significantly higher rates for certain countries. China faces a steep hike with a combined 54% duty, while Vietnam, Taiwan, India, Japan, and the European Union also see sharp increases. Canada and Mexico remain exempt for now, but this could change if existing tariffs are removed. The markets reacted negatively, with U.S. stock futures plummeting. The Dow dropped over 1,000 points, and both the S&P 500 and Nasdaq suffered significant losses. The crypto sector mirrored this downturn, with the overall market capitalization falling by 4% to $2.7 trillion. Bitcoin initially rallied to $88,500 during Trump’s speech but quickly fell to $83,073—a 2% loss within 24 hours. Ethereum and Solana also experienced declines.
The market rout triggered $514 million in liquidations over 24 hours, with $290 million from long positions, according to Coinglass data. Notably, the CMC Altcoin Season Index chart shows a current score of 14 out of 100, indicating a Bitcoin-dominated market rather than Altcoin Season. Historically, a score below 25 suggests Bitcoin is leading in returns while altcoins underperform. The index has steadily declined since January, nearing its 90-day low. In the broader context, the Fear and Greed Index is at a low 24/100 (Extreme Fear), and the current Altcoin Season Index further reflects market caution. Investors appear to retreat to safer assets like Bitcoin during uncertain times, avoiding riskier altcoins.
Arthur Hayes, co-founder of BitMEX, commented on the volatility, 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 caught in the current market turbulence.
On Twitter, Arthur Hayes remarked, “Mrkt no likey ‘Liberation Day’, if $BTC can hold $76.5k btw now and US tax day Apr 15, then we are out of the woods. Don’t get chopped up!”
