Crypto Market Sentiment Drops to "Extreme Fear" as Asian Stock Crash Triggers $628M in Liquidations

Crypto market sentiment has fallen back to "extreme fear," with the broader Fear & Greed Index reading 8 at press time, while Bitcoin's reading stood slightly higher at 12. Similar fear levels were last seen early in the year before sentiment improved to neutral at 50 during Q2. The shift comes after last week's market crash reshaped investor sentiment, with Google searches related to crypto rising from around 170 to above 320 as panic intensified during both rallies and selloffs.

The selloff was compounded by a sharp downturn in Asian equities, led by South Korea's KOSPI stock market, which declined by 8.40% during the Asian session. The decline triggered a circuit breaker, with Samsung and SK Hynix recording losses of 8.66% and 5.12%, respectively. It marked the largest single-day wipeout since March 4, with trading halted temporarily in an effort to mitigate the collapse. The downturn spread across the region, wiping out $1.5 trillion in market value. Japan lost $385 billion, Taiwan lost $235 billion, and China liquidated $310 billion, while Hong Kong and India saw losses of $108 billion and $42 billion, respectively.

The weakness in Asian equities extended into digital assets, with more than 104,157 traders liquidated during the Asian market crash and total liquidations reaching $628 million. The largest single liquidation order occurred on Binance's BTC, valued at $12 million. According to CoinGlass data, the market wiped out a total of $5.70 billion in long positions over the past week.

Investor Marc Faber commented on the broader conditions, warning that investors are right to worry about paper money losing purchasing power. He noted that tightening liquidity is adding pressure as asset prices weaken, and that declines in property, crypto, and other assets are reducing liquidity, which is weighing on markets in the short term.