Crypto Crash Now Worse Than 2020, New Charts Reveal

The crypto market hasn’t seen fear like this in years, and this time, the charts say it’s even worse. Sentiment has collapsed so violently that indicators now show levels lower than the COVID-19 crash and the FTX implosion combined. Traders seem more pessimistic today than during events that nearly broke the industry.

For analysts, this level of panic isn’t a mystery, it’s a sign that the market is approaching structural exhaustion.

The Crypto Fear & Greed Index has collapsed to a reading of 6, one of the rarest and most extreme measurements of market fear. According to an X post by Michaël van de Poppe, this level typically only appears during periods of market-wide forced selling and liquidity breakdowns.

In other words, only the most violent market events in crypto history have pushed sentiment this low, and even those didn’t always hit a single-digit score.

Crash Worse Than COVID or FTX – on Paper

This time, the panic is deeper on paper than the price action suggests. Van de Poppe highlights that Short-Term PnL (Profit and Loss) has fallen to its lowest level ever recorded, meaning short-term traders are collectively underwater at an unprecedented scale.

His comparison is striking:

“The Short-Term PNL has hit its lowest number ever. This crash is more severe than the COVID-19 or FTX crash in terms of impact on indicators.”

This implies the market perceives this downturn as worse than events that liquidated half the industry and erased billions in hours. Extreme emotional conditions like this typically correlate with structural market bottoms, where forced sellers capitulate and long-term holders quietly begin accumulating.

Why This Is a “Buy-the-Dip Moment”

Despite the chaos, many analysts are surprisingly bullish long term. Historically, when the Fear & Greed Index falls into single digits, it coincides with the final stages of market-wide capitulation, the point at which durable reversals often begin forming.

Van de Poppe summed it up bluntly:

“Buy the dip.”

The logic follows prior cycles where deep fear equals flushed leverage, exhausted sell-side pressure, and long-term holders stepping in at discounted prices. Markets rarely stay this oversold for long.

What Happens Next?

For the time being, the crypto industry’s market cap stands at $2.83 trillion, recording a whopping 22% decrease from $3.64 trillion 30 days ago, and its representative asset, Bitcoin, is struggling to keep its head above the critical support zone at $82,067.

All things considered, the recipe for a rebound is forming through deep fear, violent flush-outs, traders calling the bottom too early, liquidity wiped, shorts piling in, and indicators hitting levels that never persist for long. If history repeats itself, this phase becomes the base for the next upswing. But recoveries take time, and the market isn’t done shaking people out yet.

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