Extreme Fear Psychology Prevails: Bitcoin and Ethereum Face Massive Sell-Off Risks

Bitcoin and Ethereum are still trending downward after the weekend, and there is a possibility that this will continue into the new week. Some recent developments have affected the cryptocurrency market, which may further intensify the negative sentiment that already exists in the cryptocurrency industry. Therefore, with Bitcoin and Ethereum being leading digital assets, they may be among the first to be impacted by a wave of negative news coming from the market. American-Iran War Far From Over: Bitcoin and Ethereum Prices Could Drop Sharply In February 2026, the United States attacked Iranian military forces, leading to the war that is known today as the U.S.-Iran war. Since then, tensions have remained high, financial markets have suffered severe losses, and risk assets such as Bitcoin and Ethereum have been no exception. In the month following the initial attack, there were negotiations over a ceasefire order. However, in his latest speech, President Donald Trump completely dashed hopes for a ceasefire. According to a report from SoSoValue, this has now pushed the situation toward escalation rather than resolving the issue. With President Trump rejecting the need for global oil and asking other countries to protect the Hormuz Strait, oil prices are expected to rise during this period. In addition, expectations of interest rate hikes could negatively affect the prices of Bitcoin and Ethereum during this time. The Crypto Market Faces Cyber Attacks Again As the market shifted into a bearish phase and Bitcoin and Ethereum prices plunged, attacks on the cryptocurrency market appeared to have slowed down. Until news of an attack on the DRIFT protocol broke out late last weekend. According to reports, the Solana protocol became the target of North Korean hackers, and they ultimately succeeded. In just 12 minutes, these bad actors managed to infiltrate the protocol’s wallet and steal $285 million; the attack is believed to have been carried out by the Lazarus group. Naturally, the withdrawal of liquidity from the market remains a major concern, especially when Bitcoin and Ethereum are facing low liquidity. The DRIFT token also dropped sharply by 40% immediately after the news was announced, causing the market to fall into a state of shock. Blockchain analytics expert ZachXBT also weighed in, criticizing Circle for not taking action while USDC from the DRIFT attack is being transferred across more than 100 transactions. This money was then moved from Solana to Ethereum, leaving users wondering what Circle is doing to protect against these attackers. Market Sentiment Drops to a Record Low Another factor that could push the prices of Bitcoin and Ethereum lower is that investors remain very cautious when putting money into the market. The Crypto Fear and Greed Index is currently at Extreme Fear, marking a time of low liquidity and low participation in the market. If market sentiment does not improve and liquidity does not return, the prices of Bitcoin and Ethereum could continue to fall. This could trigger a domino effect, in which investors rush to sell to minimize losses, leading to a sharp decline.