Market confidence has struggled since a massive October 2025 liquidation event, while declining Coinbase revenues and warnings from Michael Burry highlight ongoing financial pressure.
Just when things couldn’t get any worse for the market, the Crypto Fear and Greed Index hit a record low.
The gauge fell to 5 on Feb. 12, its weakest reading to date, indicating broad risk aversion. The index combines signals from volatility, momentum, social media activity, Bitcoin dominance and search trends into a single score from 0, extreme fear, to 100, extreme greed.
This comes as BTC hovers above the US$68K level, with more investors treating US$60K (AU$91K) as the market’s stress point, with derivatives positioning and technical levels clustering around that zone as sentiment across crypto continues to sour.
As Crypto News Australia reported, the largest concentration of open interest sits in put options that pay out if Bitcoin falls below US$60,000. Open interest in those US$60,000 puts is about US$1.24 billion (AU$1.90 billion). Just below, BTC’s 200-week moving average, a long-term support level watched by many traders, sits a little above US$58,000 (AU$88,740).
A Deep Red Market
The mood shift has been building for months, with many market participants tracing the break in confidence back to Oct. 10, 2025, commonly referred to as 10/10.
That day saw what was described as the largest liquidation wave in crypto history, with more than US$19 billion (AU$29.07 billion) of leveraged positions forcibly closed in 24 hours across more than 1.6 million accounts.
Bitcoin fell about 14% and altcoins dropped far more sharply, exposing how quickly thin liquidity and heavy leverage can turn a selloff into a cascade. Sentiment has struggled to recover since.
The downturn is also showing up in listed companies tied to crypto prices and trading volumes. Investor Michael Burry warned in a Substack post that further declines in BTC could translate into sizable losses for public firms and potentially spill into other markets.
He argued the crypto asset has acted more like a speculative trade than a hedge, contrasting its recent weakness with gold and silver reaching record highs on geopolitical tension and currency concerns.
Coinbase’s latest results underscored that pressure with a Q4 revenue of US$1.78 billion (AU$2.72 billion), down 22% from a year earlier and below the US$1.84 billion (AU$2.82 billion) analysts expected.
Read more on Crypto News Australia
