Despite an “Extreme Fear” reading, analysts highlight signs of resilience and potential reversal across key indicators
Crypto market sentiment has plunged to its weakest level in more than eight months, reflecting escalating concerns around macroeconomic uncertainty and continued price pressure on major assets. The latest reading from the widely followed Crypto Fear & Greed Index shows a deep deterioration in investor confidence — yet several analysts argue the downturn may not be as severe as it appears on the surface.
Extreme Fear Reading Signals Heightened Anxiety
The sentiment index fell to an “Extreme Fear” score of 10, its lowest level since Feb. 27. The drop followed Bitcoin’s slide below $95,000, where it remained under $96,000 at the time of reporting.
However, some experts say the current environment differs from past periods of capitulation.
A senior researcher explained that “sentiment is clearly bearish, but not nearly as washed out as previous corrections at similar price levels.”
Earlier this year, the index hit a similar bottom shortly after spot Bitcoin ETFs recorded their worst-ever single-day outflows of $1.14 billion, contributing to a dramatic fall from $102,000 to $84,000. This time, however, supporting indicators appear more constructive.
Analysts See Positive Divergences Despite Fear
Bitwise’s European head of research, Andre Dragosh, noted that internal sentiment metrics are beginning to show early signs of stabilization.
“Our Cryptoasset Sentiment Index continues to show a positive divergence,” Dragosh said, suggesting bearish momentum may be weakening.
Market uncertainty remains elevated as investors await further signals on U.S. monetary policy. While the resolution of the government shutdown briefly eased pressure, traders continue to focus on the Federal Reserve’s upcoming decisions on interest rates — frequently tied to crypto volatility.
Some chart analysts see emerging bullish patterns despite the downturn. NorthmanTrader founder Sven Henrich highlighted a “falling wedge” structure paired with positive divergence, calling it “potentially positive” for Bitcoin bulls.
A research manager known as DRXL added that current market sentiment feels unusually disconnected from underlying developments, noting:
Meanwhile, other analysts argue that the absence of a late-year price surge could ultimately strengthen market foundations. As one investment officer put it, “The biggest risk would’ve been a massive rally into year-end followed by a harsh pullback.”
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.