As a result, when a sell-off starts, it triggers cascading liquidations, amplifying market instability and price crashes. The analyst has also pinpointed that this polarization phenomenon works in the opposite direction, as the market can experience rapid recovery, leading to billions added to its market cap within hours. Shifts In Sentiment And Political Influence Contribute To Market Crash The Kobeissi Letter revealed that the Fear and Greed Index has fallen from a bullish stance just weeks ago to 29% extreme Fear, underscoring the speed at which the market’s sentiment is changing to the negative.
The analyst suggests that the extreme positioning in the crypto market is leading to these increasing flash crashes, making crypto significantly unpredictable. Related Reading: Crypto Fear And Greed Index Barrels Toward Extreme Greed Again As Bitcoin Price Clears $101,000, Is This Good News?
The analyst revealed that the increasing number of flash crashes has resulted in over $300 billion being removed from the market in just 24 hours. Related Reading: Crypto Liquidations Cross $2.22 Billion, Here’s How Much Dogecoin Traders Lost He disclosed that on the previous day, the market began selling off, with Bitcoin dropping below the $95,000 mark.
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