Extreme Fear Replaces Greed in Crypto Market After $120 Billion Drawdown

The Crypto Fear and Greed Index fell to 24 on January 21, 2026, signaling a sharp return to extreme fear after briefly entering greed territory last week. Market sentiment has deteriorated sharply as cryptocurrencies face another major drawdown amid escalating geopolitical tensions. Crypto Market Sentiment Collapses Into Extreme Fear BeInCrypto reported earlier this week that President Trumps tariff threats against the European Union sparked a wider market sell-off, weighing heavily on risk assets. The pressure intensified on Tuesday. Speaking at Davos, US Treasury Secretary Scott Bessent reaffirmed the Trump administrations readiness to deploy tariffs as a primary geopolitical tool, a stance that further unsettled global markets. BeInCrypto Markets data showed that Bitcoin (BTC) fell below the $90,000 level, even briefly dipping under $88,000. Ethereum (ETH) also dropped under $3,000. The overall sell-off erased more than $120 billion from the total cryptocurrency market capitalization over the past 24 hours. Crypto Market Performance on January 21. Derivatives markets reflected the severity of the move, with widespread forced liquidations. More than 182,000 traders were liquidated in the past day, pushing total liquidations to $1.08 billion. Long positions accounted for $989.9 million of the losses. The sharp sell-off has also weighed heavily on investor sentiment. The Crypto Fear and Greed Index dropped to 24 today. This marks a return to extreme fear after the market reached greed territory at 61 just last week, on January 15. Risk-off is back. Capital is running for safety, a market watcher wrote. The index provides a broad snapshot of crypto market psychology. It aggregates data from multiple factors, including volatility, market volume and momentum, social media activity, Bitcoin dominance, and Google Trends. Crypto Fear and Greed Index. Analysts Weigh In as Crypto Confidence Weakens In a post on X (formerly Twitter), analyst Rex said investor interest in the sector has deteriorated to the point of widespread apathy. The current mood seems even more worrying because its driven not only by price but by growing disillusionment with cryptos long-term narratives. The analyst noted that even long-time crypto participants are increasingly shifting their focus to stocks and commodities. This indicates a loss of confidence rather than just a temporary lull. No one wants to make angel investments in this space, no one believes any of the bullshit narratives.. No one cares anymore. It literally cant get any worse for sentiment than right now.. Bottom of the COVID crash people still believed in this industry, what we have now is worse, the post read. Nonetheless, some investors remain confident about a comeback. Analyst Doc suggested that sentiment at Bitcoins actual bottom will likely be worse than after the FTX collapse, even if the current drawdown is smaller. This conviction is based on the belief that cryptocurrency remains a powerful asymmetric investment, with long-term upside outweighing downside risk despite prevailing pessimism. Im not a big predictions guy, but if I had to pick one- sentiment at the actual BTC bottom will be worse than post-FTX despite the bitcoin drawdown not even coming close to 2022 and crypto will once again be the best asymmetric bet in capital markets. Thats why Im staying, he noted. Both post-FTX and $80k in Nov the general sentiment was that it's simply over for good for crypto."Crypto failed, it can't outperform gold""Saylor isn't going to buy any more, nobody is left""Why trade crypto, I'm going to equities"Not as bad as post-FTX but close. Gammichan (@gammichan) January 21, 2026 Looking ahead, market direction will likely hinge on how macroeconomic and geopolitical developments evolve in the coming weeks. Until clarity emerges, volatility may remain elevated and sentiment fragile. Read the article at BeInCrypto