Author: Frank, PANews
The violent fluctuations in the cryptocurrency market and the extreme swings in investor sentiment go hand in hand, with the "Fear and Greed Index" becoming an intuitive data point for investor psychology. On April 7, global financial markets experienced a major shock due to concerns about increased global tariffs, followed by a surge of panic.
Looking back, since 2018, the crypto market has experienced 239 instances of the index falling below 20, representing "extreme fear" moments. This article does not intend to dramatize the market's negative sentiment, but rather hopes to systematically review these key nodes, learn from history, and attempt to uncover potential cyclical patterns. PANews's research focuses on the distribution characteristics and duration of these panic moments, analyzing whether they contain market signals worth noting.
2018: Panic Under Regulatory Shadows
From the panic index perspective, this period was characterized by occasional market panics over an extended time. In February 2018, BTC dropped 70% from its high of $19,000 to around $5,900 within 50 days. This was the first occurrence of panic sentiment.
During several bottoming processes, the market experienced panic sentiment. Statistically, 2018 saw 93 instances of panic index below 20, making it the year with the most panic moments. Among these, the panic index reached as low as 8 on February 5, sustained for 23 days from August 20 to September 11, and for 27 days from November 20 to December 16.
In terms of short-term market trends, these panic phases were almost all short-term bottoms. After panic, the market experienced different degrees of temporary rebounds. However, these rebounds ultimately failed to form new trends and became additives to market depression.
Here are the news-related influencing factors behind these panic moments:
February 4-5, 2018: SEC launched a large-scale ICO investigation; multiple banks banned credit card purchases of Bitcoin.
March 28-April 1, 2018: SEC announced it would begin regulating crypto institutions.
May-June 2018: Korean crypto exchange Coinrail was hacked, losing over $40 million; CFTC issued subpoenas to major exchanges including Coinbase, Kraken, and Bitstamp.
August-September 2018: SEC delayed decisions on Bitcoin ETF applications; China's five ministries issued risk warnings about "virtual currency" speculation.
November 20-December 16, 2018: Bitcoin price dropped 80% from its peak, losing nearly a third of its value in a week, reaching a low of around $3,100 in December. Bitcoin miner growth stopped in August, with hash rate significantly declining in November.
From these major news-related impacts, the 2018 panic was primarily influenced by policy, with regulatory messages from SEC, CFTC, and others creating an atmosphere of trepidation.
After these panic moments, the market entered an upward cycle after approximately 4 months of consolidation.
(Translation continues in the same manner for the rest of the text)The market crash in 2022 was mainly caused by the Terra/Luna collapse. On May 9, UST depegged from the US dollar, and the Terra blockchain was suspended. Celsius Network suspended all transfers and withdrawals on June 13. Three Arrows Capital (3AC) defaulted in June and was ordered to liquidate in July. BTC dropped below $30,000, the first time since July 2021. On July 13, the global cryptocurrency market capitalization was $87.1 billion.
However, the 2022 crash was not just about Luna's depeg. In November, the FTX exchange collapse also brought panic to the market, with BTC falling to its lowest point of $15,479 in nearly 3 years. However, this crash did not show much volatility on the panic index, which dropped to a low of 20.
This suggests that when the market is at the end of a bear market, events that feel intuitively strong may not show much on the index. Conversely, when the market seems to be in panic, but the index does not fluctuate significantly, it may be a moment of potential market reversal.
2023-2024: Panic Subsides and Market Recovery
After the 2022 market bottomed out, the market fully returned to an upward cycle. The panic index throughout 2023 never dropped below 20, until August 2024 when it fell to 17, indicating extreme panic. However, this panic was due to a quick pullback during an upward trend.
2025: Panic Reappears and Future Uncertainty
Panic moments in 2025 seem to become frequent again. As of April 8, the panic index has dropped below 20 three times. On February 26, it fell to 10. On March 3, it dropped to 15. On April 7, due to increased global tariffs under the Trump administration, global financial markets crashed, and BTC dropped below $75,000. However, the panic index did not break 20, similar to the FTX collapse in November 2022. However, after the FTX collapse, the crypto market truly hit bottom and began to rebound and grow into a bull market. Is this tariff impact the beginning of a downturn or a bottom signal?
Reflections After 239 Panic Moments
Reviewing all panic moments since the panic index's inception, according to PANews, the crypto market experienced 239 extreme panic moments (value below 20) in over 6 years. In most cases, these panic moments were caused by sharp market declines and were at a short-term stage bottom.
Through further analysis of these panic moments, PANews summarized the following interesting patterns.
1. Panic moments are mostly concentrated in two stages: the end of a bear market, where market liquidity shrinks and market sensitivity increases, often triggering black swan events like 3.12 or FTX collapse; and the early stage of a bull market's end, when prices double-top and start to fall, causing panic selling.
2. The duration of a single panic index seems more meaningful. Whether it was November-December 2018 (27 days below 20), March-April 2020 (43 days below 20), or May-July 2022 (65 days below 20), these concentrated panic phases often indicate the market is near its bottom.
3. Sporadic and long-interval panic moments often have little reference value for market trend judgment. Many believe that after entering extreme panic, the market will rebound. While this works in short-term trends, expanding the cycle reveals that such sporadic panic moments do not necessarily indicate a market reversal.
4. Panic moments have become less frequent in recent years. There were 93 in 2018, 73 in 2022, but only 1 in 2023 and 2024. This is partly due to the crypto market's growing size and reduced volatility, but also suggests the market might enter a phase with more frequent panic moments in 2025.
Looking at the 239 "extreme panic" moments from 2018 to early 2025, we glimpse a pattern in the crypto market's emotional tides: panic often concentrates at the end of a bear market and the early stage of a bull market's decline. Continuous deep panic is more likely to indicate a stage bottom than sporadic panic, confirming the market philosophy of "extremes breed reversal".
History does not simply repeat but often rhymes. Understanding the signals from the panic index, carefully distinguishing between short-term fluctuations and long-term trends, and comprehensively judging based on macro events and market structural changes will be crucial for investors navigating the unpredictable crypto world. Ultimately, whether the current market is the prelude to a new downturn or a "panic is opportunity" bottom signal remains to be seen.
