Crypto Sentiment Hits 'Extreme Fear' Amid $2.7 Trillion S&P 500 Wipeout

A significant sell-off in the U.S. stock market has led to widespread investor pessimism, pushing market sentiment into 'extreme fear' territory. The S&P 500 index dropped almost 4%, causing a market capitalization loss of $2.7 trillion. This sell-off affected various risk assets, including cryptocurrencies, which saw liquidations soar to $829 million. Analysts attribute the decline to various factors, including widening U.S. credit spreads, concerns over macroeconomic conditions, and a potential shift in Federal Reserve interest rate policy. Despite receiving strong job statistics earlier, a lack of clarity around future rate cuts has caused market volatility. Investors are cautious, leading to a downturn in sentiment across both crypto and traditional equity markets. Moving forward, if macroeconomic indicators suggest a forthcoming rate cut, sentiments could recover; however, the current uncertainty signals a choppy market environment as year-end portfolio adjustments take place.

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