The panic index has crashed to a new low! Retail investors are cutting losses and leaving the market, while institutions are secretly catching a falling knife?

The cryptocurrency market sentiment has plummeted sharply, with the fear index falling below a key threshold. According to the latest data from Alternative, on August 30, this index dropped to 39, a significant decline from the previous day's 50. Not only did it fall out of the neutral zone, but it also dropped below 40 for the first time since the end of April, with the market rapidly shifting from "neutral" to "fear."

This change is due to three main factors:

1. Macroeconomic Level: The recent hawkish stance of the Federal Reserve, coupled with increased volatility in global risk assets, puts cryptocurrencies at the forefront as high beta assets.
2. Market Internal: Structural vulnerabilities are highlighted, with some altcoins experiencing flash crashes due to insufficient liquidity (such as a certain small to mid-cap token dropping over 40% in a single day), further amplifying panic.
3. Capital Reaction: Investors react sharply to short-term liquidity tightening, macro uncertainty, and institutional selling pressure.

From historical and current data, there are two key signals:

1. Historical Experience: A rapid drop of the panic index below 40 often indicates that the market is oversold in the short term, but whether a rebound occurs depends on the movements of the main capital (such as Bitcoin ETF fund flows and changes in institutional holdings).
2. Current Status: On-chain data shows that long-term holders have not sold off en masse, which may act as a market stabilizer; and extreme sentiment is often a precursor to market reversals (for example, after the index fell below 30 in January this year, Bitcoin immediately rebounded over 20%).

In the current market panic, will you choose to go against the trend and position yourself, or will you cautiously observe?
$BTC