TL;DR
- The sentiment indicator plummeted to 15 points, its lowest level since February, marking a state of “Extreme Fear.”
- Santiment reports a drastic rise in negativity for Bitcoin, Ethereum, and XRP, which often precedes price rebounds.
- Analysts debate whether a local bottom is forming or if Bitcoin will drop to $90,000 before recovering.
Investor psychology is currently dominating the crypto market. Following the historic liquidation event on October 11, morale remains low, and pessimism is deepening. Yesterday, Wednesday, the Fear and Greed Index collapsed, hitting 15 points and marking an “extreme fear” zone.
We are talking about the lowest level recorded since February 2025 for a metric that evaluates volatility, volume, and social trends to gauge the market’s emotional temperature.
February 27 was the last time this indicator fell below 20 points. What followed was a 25% correction in Bitcoin’s price, taking it to $75,000 a month later. This precedent has raised alarms about the possibility of a similar correction.
Despite the outlook, many veteran investors interpret this data from a “contrarian” perspective: when the Fear and Greed Index shows widespread panic, it often signals a buying opportunity for those who act quickly.
Analyst Outlooks: Capitulation or Deep Correction?
On-chain analytics firm Santiment supports the bullish theory in a recent report. The study reveals that negative discussions regarding Bitcoin, Ethereum, and XRP are rising drastically. Historically, when the crowd becomes excessively bearish, it indicates the market is approaching a capitulation point.
According to the report, once retail investors sell in panic, “strong hands” or key stakeholders accumulate the assets, driving prices up. “It’s not a matter of ‘if’, but ‘when’ this will happen,” the report notes.
Other analysts agree with this theory. Joe Consorti suggests a local bottom is forming as weak hands are shaken out of the market, arguing that patience is key at this time.
On the other hand, Kyle Reidhead from Milk Road offers a more cautious view, projecting that this negative sentiment reflected in the Fear and Greed Index could push Bitcoin toward the $90,000 range before a solid rebound materializes.
Although the “buy the fear” strategy has worked over the years, risk persists for retail investors, who often lose capital due to excessive leverage or a lack of resilience to endure prolonged periods of macroeconomic uncertainty.
