Bitcoin Crash Sparks $1B Liquidation as Fear and Greed Index Hits Extreme Low

The crypto market just took a brutal hit — and it’s got everyone talking. Bitcoin and major altcoins are deep in the red, billions have vanished overnight, and fear is spreading fast. With the Crypto Fear & Greed Index plunging into extreme fear, traders are on edge, watching closely to see if this is just a dip — or the start of something bigger.

What triggered the chaos? And could there still be a twist in this sell-off story? Let’s break it down.

Tariff War Fears Spark Massive Sell-Off

The sharp drop in prices was triggered by rising concerns over a global tariff war — a situation investor Bill Ackman called an “economic nuclear war.” This uncertainty has shaken the markets, pulling Bitcoin down by over 9% and sending major altcoins like XRP, Cardano (ADA), and Dogecoin (DOGE) down as much as 14%. All three fell below important support levels by Monday morning.

Data from CoinMarketCap shows the Crypto Fear & Greed Index has dropped to 17, signaling “extreme fear.” Bitcoin fell to $75,000, dragging the total crypto market cap down by nearly 10% to $2.4 trillion. Berachain led the losses with a 21% crash, hitting a record low of $4.6 — more than 50% below its peak. Other top tokens like AAVE, Litecoin, Lido DAO, Maker, Movement, and Ethena also dropped sharply, losing over 15%.

Over $1 Billion in Crypto Wiped Out

As the market crashed, more than $1 billion in crypto positions were liquidated. Bitcoin and Ethereum alone made up $638 million of that total. More than 324,000 traders were affected — including one Bitfinex user who lost a staggering $23 million.

The Fear & Greed Index dropping to 17 reflects just how uneasy the market has become.

Charlie Sherry from BTC Markets said the timing of the crash isn’t surprising. Crypto markets tend to have lower liquidity on Sundays, meaning fewer trades can cause bigger price swings. A few large sell-offs can lead to steep drops.

Could Government Disclosures Boost the Market?

Despite the panic, some experts believe there’s still hope. Edul Patel, co-founder and CEO of Mudrex, said investor sentiment is clearly weak — but added that upcoming U.S. government disclosures could change that. Federal agencies are expected to reveal their crypto holdings later today, which might trigger a short-term relief rally.

Federal Crypto Holdings Report Due Today

A White House official told journalist Eleanor Terrett that federal agencies are required to report their Bitcoin and crypto holdings to Treasury Secretary Scott Bessent by Monday. These reports could give markets a better picture of how much digital asset exposure the U.S. government really has.

Some traders are even suggesting a comeback could be on the horizon. BitMEX co-founder Arthur Hayes believes that while fears of global tariffs are hurting the market right now, they might actually help Bitcoin in the long run by driving more interest in decentralized assets.

In crypto, fear can be a signal just as much as a warning – what comes next might surprise both bulls and bears.