Market Panic Deepens: DOGE, ADA, and XRP Drop 10% as Sentiment Index Hits Lowest in 17 Months

Crypto Markets Reel as Bitcoin Falls to $80K, Fear Index Hits 17-Month Low

Investors remain cautious as they assess macroeconomic trends and policy developments, bracing for further market volatility in the months ahead.

The cryptocurrency market extended its losing streak for a second straight week, with Bitcoin (BTC) slipping to nearly $80,000 late Sunday. The downturn triggered sharp declines across major altcoins and tokens.

Dogecoin (DOGE) and Cardano’s ADA led the losses with nearly 10% drops in the past 24 hours, followed by XRP, which fell over 7%. BNB Chain’s BNB, Ethereum (ETH), and Tron (TRX) declined by approximately 5%, while BTC itself slid 4%, according to market data.

The widespread sell-off pushed the Crypto Fear and Greed Index to 17, marking its lowest level since mid-2023 and signaling ‘extreme fear’ among investors.

Market Sentiment Hits Rock Bottom

The Fear and Greed Index, which measures investor sentiment on a scale from 0 (extreme fear) to 100 (extreme greed), is widely used to gauge potential market reversals. It is derived from price volatility, trading momentum, social media sentiment, search trends, and Bitcoin’s dominance. Historically, extreme fear can signal a buying opportunity, while extreme greed often precedes corrections.

The latest slump has erased all gains made after President Donald Trump announced the creation of a U.S. strategic crypto reserve earlier this month. That news had initially sent tokens like XRP, Solana (SOL), and ADA surging up to 60% within days.

However, market enthusiasm waned when Trump clarified that the reserve would primarily consist of previously seized BTC holdings, while non-BTC assets would be classified as a ‘stockpile’ rather than an actively managed fund.

Disappointment at White House Crypto Summit

Adding to the bearish sentiment, the White House Crypto Summit on March 7 failed to deliver the regulatory clarity that traders had anticipated. Instead of bold policy shifts, the summit concluded with plans for a stablecoin regulatory framework by August and a promise of lighter oversight—neither of which provided immediate support to the market.

Macroeconomic Uncertainty Weighs on Crypto

Broader global economic pressures have intensified crypto’s downturn. An escalating tariff war initiated by Trump and other world leaders has rattled financial markets. Meanwhile, the U.S. dollar index (DXY), which tracks the dollar’s strength, has weakened to below 105—its lowest level since November. While a weaker dollar often supports risk assets, the ongoing uncertainty has kept crypto investors hesitant.

“The summit initially signaled optimism,” Kevin Guo, Director of HashKey Research, told CoinDesk via Telegram. “But expectations for significant policy shifts were unmet, and crypto continues to mirror U.S. equities in a downward trend after February’s job report showed stability despite public sector job cuts.”

Additionally, Federal Reserve Chairman Jerome Powell reaffirmed the Fed’s patient approach toward reaching a 2% inflation target, tempering hopes for an imminent interest rate cut. This has further dampened investor sentiment, as lower rates typically encourage risk-taking in markets like crypto.

Hope for a Market Rebound?

Despite the prevailing bearish outlook, some traders are betting on a potential market turnaround. Bloomberg reports that investors have been accumulating short-term U.S. Treasuries, anticipating that the Federal Reserve may resume interest rate cuts as early as May to prevent economic deterioration. Lower rates often lead to increased inflows into speculative assets like cryptocurrencies, offering a potential tailwind for market recovery in the months ahead.