The Crypto Fear & Greed Index dropped to an extreme low of 5, reflecting intensifying investor panic and risk aversion. This deterioration occurs alongside surging global economic uncertainty, with total crypto market capitalization down over 22% in 2026, led by significant losses in Bitcoin and Ethereum. Analysts suggest that while extreme fear may present buying opportunities, the market is likely entering a prolonged phase of reassessment with volatile rebounds possible before any sustained recovery.