Crypto sentiment has dropped to its most fearful level in over eight months, as ongoing macroeconomic uncertainty continues to rattle market participants. However, crypto analysts are anticipating the bearish mood to be short-lived.
The Crypto Fear & Greed Index, which measures overall market sentiment, posted an “Extreme Fear” score of 10 in its Saturday update, the lowest score it has seen since Feb. 27. This occurred as Bitcoin (BTC) fell below $95,000 on Friday and has yet to reclaim above $96,000 at the time of publication, according to CoinMarketCap. The February low came just days after spot Bitcoin ETFs saw their worst-ever single-day outflows of $1.14 billion, as Bitcoin fell from $102,000 at the start of the month to $84,000.
Indicators Suggest Market is Less Bearish Than Previous Downturns
Crypto market participants use sentiment indexes to gauge the broader market’s sentiment toward the sector and inform their decisions on whether conditions favor buying or selling.
However, Bitwise’s European head of research, Andre Dragosh, argued the situation isn’t as bleak as it may appear when compared with past downturns.
“Sentiment index is bearish but less so than during previous corrections despite lower prices,” Dragosh said in an X post on Friday, pointing to Bitwise’s crypto sentiment index showing signs of reversal.
“Our Cryptoasset Sentiment Index also continues to show a positive divergence,” Dragosh said.
While US President Donald Trump recently signed a bill ending the longest government shutdown in US history, an event some crypto market participants had blamed for recent volatility, uncertainty persists around the US Federal Reserve’s interest-rate cut decision, which is often linked to the crypto market.
Bitcoin Chart Signaling Potentially Positive Move Ahead
Meanwhile, NorthmanTrader founder Sven Henrich told his 503,400 X followers on Friday that Bitcoin’s price chart is showing “something potentially positive” for Bitcoin bulls. “Falling wedge, positive divergence,” Henrich said.
A Messari research manager, known online as “DRXL,” said that in his eight years working in the crypto industry, he has never seen “such dissonance between the headlines and the sentiment.”
“Everything we once dreamed of is happening, yet it somehow feels… over,” he said.
Some analysts see the lack of a year-end surge as a healthy sign. Bitwise chief investment officer Matt Hougan recently told Cointelegraph that “The biggest risk was [if] we ripped into the end of 2025 and then we got a pullback.”