Fear and Greed Index: dropped to 10 (Extreme Fear), 2018 Bear Market level

1. The Federal Reserve's interest rate cut expectations collapse
The probability of a rate cut in December has dropped from nearly 100% to below 50%. With stubborn inflation in the U.S. and strong employment data, Fed officials continue to adopt a hawkish stance. In a high-interest-rate environment, all high-risk assets (tech stocks + cryptocurrencies) are being sold off, and BTC/ETH is essentially the "high Beta version of Nasdaq."
Nasdaq up 1% → BTC/ETH average up 3~4%
The Nasdaq 100 Index has fallen about 6 to 8% from its peak in November.
Bitcoin dropped from 126,000 to 91,000 → a decline of about 28% (approximately 4 times that of Nasdaq)
2. Large Exodus from Bitcoin/Ethereum Spot ETFs
Since November, the US BTC ETF has seen continuous net outflows (with a single-week high of nearly $1 billion), as institutions take profits and hedge, directly withdrawing liquidity from the market. The Ether ETF is similarly suffering. The ETF was originally the engine that pushed BTC to $126,000 this year, but now it has become a "cash machine."
3. High Leverage Liquidation Cascade
After accumulating too much long leverage since the peak in October, breaking through the psychological levels of 100,000, 95,000, and 90,000 triggered over 1 billion USD in forced liquidations, amplifying the decline. Altcoins fared even worse, with SOL, XRP, DOGE and others plummeting by 10-20%.
4. Concerns about the AI/tech stock bubble spillover
Nvidia's earnings report led to a decline in technology stocks (Nasdaq suffered consecutive heavy losses), with the crypto market having a correlation coefficient with tech stocks exceeding 0.9, both being sold off together. The market is now treating BTC as the "purest risk asset" to sell.
5. Year-end liquidity seasonal tightening + macro uncertainty
The aftermath of the U.S. government shutdown, uncertainty surrounding Trump’s trade tariffs, and poor economic data from China have tightened global dollar liquidity, with risk assets being the first to suffer.