Bitcoin plunges below $81K as market sentiment hits 'extreme fear' amid widespread crypto selloff.
KEY NOTE: While other fear and greed indexes solely track Bitcoin sentiment, the CMC Crypto Fear and Greed Index measures sentiment across the entire crypto market, providing a more comprehensive market indicator. This approach helps investors understand whether the market may be undervalued (extreme fear) or overvalued (extreme greed), directly influencing trading behavior.
Bitcoin plunged below $81,000 early Monday, hitting a low of $80,120 at 12:35 AM UTC on March 10, 2025, marking an 11% decline over the past seven days. The leading cryptocurrency has since recovered slightly to $82,000 (at the time of writing), but market sentiment has dramatically shifted.
Source: Bitcoin price
For the first time since the FTX collapse, the market has entered "extreme fear" territory, with the Crypto Fear & Greed Index registering a reading of 17 on March 10.
Source: Crypto Fear and Greed Index
This stark shift in market psychology comes amid mounting liquidations, with Coinglass reporting $649.07 million wiped out in the past 24 hours alone.
Source: Coinglass
"It looks like Bitcoin will retest $78,000," warned Arthur Hayes, BitMEX co-founder and Maelstrom chief investment officer, in a recent statement. "If it fails, $75,000 is next in the crosshairs."
The selloff extends beyond Bitcoin, with Ethereum suffering even more severe losses. The second-largest cryptocurrency dropped to $1,999 (before settling back above $2,102), representing a staggering 15% decline in the past week.
Market research firm 10x Research characterized the current downturn as a "textbook correction" in an analysis published on March 10. "With Bitcoin dipping below $80,000, approximately 70% of all selling came from investors who bought within the last three months," the firm noted, highlighting "the dominance of recent entrants panic-selling into the decline."
The market turbulence comes just days after President Donald Trump signed an Executive Order establishing the Strategic Bitcoin Reserve, which initially sparked optimism. However, the enthusiasm quickly faded when traders realized no immediate budget had been allocated for Bitcoin purchases.
"The knee-jerk reaction lower likely stems from the realization that no actual budget has been allocated for Bitcoin purchases in the near term," explained Singapore-based digital asset trading firm QCP Capital.
The selloff is further compounded by macroeconomic concerns, as two key inflation reports are due in the United States this week. These could significantly influence Federal Reserve monetary policy if inflation continues to rise. Additionally, escalating trade tensions following Trump's tariff announcements have rattled global markets, with Canada now responding with retaliatory measures.
Some analysts believe the correction could be more severe. The historically accurate "Lowest Price Forward" tool suggests Bitcoin's true floor may be around $69,000—a level that would represent a 37% correction from recent highs but would still maintain the previous all-time high from 2021. This tool gives 95% certainty that Bitcoin will not drop below this level.
Despite the current market panic, the upcoming Bitcoin for America event on March 11, hosted by Senator Cynthia Lummis and the Bitcoin Policy Institute, could provide clarity on legislative involvement in the Strategic Bitcoin Reserve, potentially influencing market sentiment in the days ahead.
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