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Crypto sentiment fell to its most fearful level in more than eight months as macroeconomic uncertainty continues to rattle market participants.
However, crypto analysts anticipate that the bearish mood will be short-lived.
A Crypto Fear & Greed Indexwhich measures overall market sentiment, posted an “Extreme Fear” score of 10 in its Saturday update, the lowest score it has seen since February 27, as Bitcoin (BTC) fell below $95,000 on Friday and is yet to recover above $96,000 at press time, according to at CoinMarketCap.
The February low came just days after the Bitcoin ETF saw its worst one-day outflow of $1.14 billion, as Bitcoin fell from $102,000 at the start of the month to $84,000.
Indicators suggest the market is less bearish than previous downturns
Crypto market participants use sentiment indices to gauge broader market sentiment toward the sector and inform their decisions on whether conditions favor buying or selling.
However, the head of research in Europe of Bitwise, Andre Dragosh, argued that the situation is not as bleak as it can be compared to past recessions.
“The sentiment index is bearish, but less so than during previous corrections despite lower prices,” Dragosh he said in a post X on Friday, indicating the Bitwise crypto sentiment index showing signs of reversal.
“Our Cryptoasset Sentiment Index also continues to show a positive divergence,” said Dragosh.
While the President of the United States Donald Trump recently signed a bill ending the longest government shutdown in the history of the United States, an event that some participants of the crypto market blamed for the recent volatility, uncertainty persists around the decision to cut the interest rate of the Federal Reserve of the United States, which is often linked to the crypto market.
Bitcoin chart signaling ‘potentially positive’ move forward
Meanwhile, NorthmanTrader founder Sven Henrich told his 503,400X followers on Friday that the Bitcoin price chart is showing “something potentially positive” for Bitcoin bulls. “Falling cone, positive divergence”, Henrich he said.
A Messari research manager, known online as “DRXL”, he said that in his eight years of work in the crypto industry, he has never seen “such a dissonance between headlines and sentiment.”
Related: “We’re buying”: Michael Saylor denies reports of Strategy dumping BTC
“Everything we once dreamed about has happened, but somehow it feels … over,” he said.
Some analysts see lack of a year-end increase as a healthy sign. Matt Hougan, Chief Investment Officer of Bitwise, recently told Cointelegraph that “The biggest risk was [if] we will tear at the end of 2025 and then we will have a pullback”.
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