The latest crypto market downturn is being driven by a mix of profit-taking, institutional outflows, macro uncertainty and thin liquidity — a combination that has pushed overall sentiment to its weakest point in months.

The Fear & Greed Index fell to 10, signaling “extreme fear” and marking its lowest level since late February. The sharp decline in sentiment follows a week of steady losses across major digital assets, led by bitcoin’s slide to just below $96,000. It was the second time this month that BTC slipped beneath the closely watched $100,000 level.

The index, a widely followed measure of investor psychology, reflects mounting anxiety as bitcoin dropped more than 5% over the past week. The world’s largest cryptocurrency is now trading at its lowest levels since early March, extending its retreat from the record highs above $120,000.

Broader market weakness mirrors bitcoin’s decline. The CoinDesk 20 (CD20) index, which tracks the largest and most liquid digital assets, lost roughly 5.8% over the same period.

“The sell-off is a confluence of profit-taking by long-term holders, institutional outflows, macro uncertainty and leveraged longs getting wiped out,” said Jake Kennis, Senior Research Analyst at Nansen, in an emailed comment. “What is clear is that the market has temporarily chosen a downward direction after a long period of consolidation.”

Traders are also grappling with shifting expectations around U.S. monetary policy. Hopes for a Federal Reserve rate cut this month have faded, with the CME FedWatch tool putting the probability of a 25 basis-point cut at around 50%. Prediction markets like Kalshi and Polymarket are pricing in similar odds.

Adding to the uncertainty, the White House said key economic releases — including October inflation data — may be delayed due to disruptions caused by the recent government shutdown, leaving traders with fewer macro signals to guide positioning.

Compounding these pressures is persistently low liquidity. Order-book depth across major centralized exchanges has yet to recover from October’s crash and remains structurally thinner, making price moves more volatile and sell-offs more severe