Crypto Market Slumps as Fear & Greed Index Drops to 17, Signaling Extreme Fear

The cryptocurrency market is experiencing a sharp downturn, with the Fear and Greed Index by CoinMarketCap plunging to an all-time low of 17, signaling extreme fear. This is the lowest level since the index was introduced in 2023, reflecting market-wide uncertainty amid a global stock sell-off.

Bitcoin Erases Post-Election Gains

Bitcoin has given up all the gains it made after Donald Trump's U.S. election victory, mirroring the broader risk-off sentiment. The downturn has been particularly severe in speculative sectors like memecoins, which saw the biggest retrace.

According to the data by Coingecko, the total market capitalization of Solana-based memecoins has collapsed from its peak of $26 billion to $6.7 billion, a staggering 74% decline.

DePIN and Solana Price Tumble

According to data by DePINscan Solana's DePIN sector has also seen a significant contraction, falling from $127 billion in January 2025 to $64 billion as of March 8—a drop of nearly 50%. 

This decline aligns with Solana's price movement, which spiked to $294 in January following Trump's meme coin launch on the network but has now plummeted to $120, its lowest level since September 2024.

AI and Memecoins See Largest Capital Outflows

Over the past seven days, AI-related tokens and memecoins have led the downturn, indicating a shift in capital outflow from these once-high-growth sectors.

However, when zooming out to a 30-day period, Raydium's RAY token has been one of the hardest hit, down 67%, largely driven by speculation that Pump.fun may introduce its own automated market maker (AMM).

Crypto and Stocks Decline in Tandem

The sell-off extends beyond crypto, as U.S. stocks are also seeing sharp declines. NVIDIA has hit a six-month low, erasing $1 trillion in market capitalization, while the S&P 500 has also dropped to a six-month low. Tesla's stock is down 43% this year. Notably, larger crypto assets like Bitcoin and Solana are now declining in line with major U.S. tech stocks, unlike previous cycles where crypto typically saw more severe downturns during risk-off events.

Market analysts attribute the slide to growing recession fears, high interest rates, and new tariffs imposed by U.S. President Donald Trump on Canada, Mexico, and China, which have put additional pressure on the economy. With concerns about slower U.S. economic growth mounting, risk assets across the board are seeing a recalibration, bringing speculative sectors back to more sustainable valuations.