Market sentiment plunges into “Extreme Fear” territory after Bitcoin slips under $106,000, sparking investor caution amid rate concerns and reduced institutional demand.
Crypto Market Sentiment Turns to Extreme Fear
Investor sentiment in the cryptocurrency market has sharply deteriorated this week as Bitcoin dropped below $106,000, marking its weakest level in over three weeks. The Crypto Fear & Greed Index — a key sentiment tracker — fell by 21 points to 21/100, signaling “Extreme Fear” for the first time in nearly seven months.
According to data from Alternative.me, the index has halved within 24 hours, sliding from a “Neutral” 42 to a deeply pessimistic 21. The last comparable dip occurred in April, when the score hit 18 after global market shocks tied to new U.S. trade tariffs.
Bitcoin Struggles to Hold Key Support
Bitcoin briefly touched $105,540 on Monday before rebounding above $106,500. The asset remains down roughly 2% on the day, having retreated from a weekly high of over $109,000. Analysts say this drop reflects a mix of macroeconomic tension and cooling institutional interest.
“Market sentiment has clearly shifted,” said digital asset strategist Omar Khan. “We’re seeing reduced ETF inflows and lighter blockchain activity, which suggests short-term traders are stepping aside until volatility settles.”
Recent data shows that Bitcoin-linked ETFs faced nearly $800 million in outflows last week — the largest since March — as institutional demand dipped below the daily mined supply for the first time in months.
Macroeconomic Pressure Weighs on Crypto
The downturn also follows the Federal Reserve’s latest rate decision, which cut rates for the second time this year but signaled a potential pause ahead. Investors, who had expected a dovish stance, reacted by trimming risk exposure.
“Uncertainty over future rate cuts has triggered a broad risk-off move,” explained market analyst Daniel Wu. “Crypto tends to mirror equity sentiment when policy shifts appear less favorable.”
Hopes for a “Moonvember” Rally
Despite the current gloom, crypto bulls remain optimistic, pointing to Bitcoin’s historical November performance. Over the past decade, Bitcoin has averaged gains of more than 42% in November, often recovering from late-year dips.
Still, with sentiment now at its lowest since April, market watchers warn that confidence must rebuild before another rally can take shape.
“Extreme fear can often signal opportunity,” Khan added, “but until buyers return in force, caution remains the name of the game.”
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.