Crypto Fear Hits Extreme as Bitcoin Loses $2.2 Trillion

Historic $2.2 Trillion Crypto Crash; Bitcoin May Fall to $40,000 Amid Extreme Fear

  • The total cryptocurrency market valuation has plummeted by $2.22 trillion from its peak, marking the second-largest dollar loss in the asset class’s history.
  • Bitcoin’s price crashed 4.5% in a two-hour window to around $64,200, erasing nearly $990 million in open interest and pushing market sentiment into “Extreme Fear.”
  • Analysts warn the bottom may not be in, with forecasts suggesting Bitcoin could fall to between $55,000-$58,000, or potentially as low as $40,000 if corporate selling intensifies.

The cryptocurrency market is mired in historic turmoil as extreme fear grips investors, wiping over $2.22 trillion from its peak valuation. Coin Bureau co-founder Nic Puckrin warns this represents the second-largest dollar loss ever recorded, with U.S. investors potentially yet to see the worst of the downturn.

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Consequently, Bitcoin’s sharp decline has accelerated the market’s pain, with its price recently dropping to lows not seen since early February. This rapid sell-off vaporized almost $990 million in total BTC open interest, according to data from Santiment, as the Crypto Fear & Greed Index plunged to a reading of 5. Meanwhile, 10x Research noted in a weekly report that volumes are dropping and traders are quietly reducing exposure.

However, some analysts view the severe dislocation as a potential setup for opportunity. Technical analyst Michaël van de Poppe noted the growing performance gap between Bitcoin and Gold, framing it as a chance to buy the dip. This perspective contrasts sharply with the prevailing bearish warnings from other market observers.

Puckrin stated, “Either way, the bear market is not over yet.” He sees a potential bottoming range of $55,000-$58,000 for Bitcoin but cautions that continued corporate selling could drive prices toward $40,000. The intensity of losses has moderated from early February, but Glassnode’s data shows the broader market remains under significant pressure.

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