TLDR
- Bitcoin’s Fear and Greed Index hit 24, signaling extreme fear in the market.
- Bitwise analysts see a buying opportunity despite external market pressures.
- Smaller Bitcoin holders have been accumulating while large holders slow down.
- Bitcoin’s price stability around $110,000 suggests institutional demand is rising.
Bitcoin’s Crypto Fear and Greed Index has reached its lowest level of the year, dropping to 24, signaling extreme fear in the market. This has led many investors to question whether Bitcoin’s recent downturn is a signal to sell or an opportunity to buy. Bitwise analysts argue that the current sentiment offers a chance for accumulation, despite external factors driving the recent market correction.
Extreme Fear in the Market
The recent drop in Bitcoin’s Crypto Fear and Greed Index reflects an environment of extreme fear, a sentiment often seen during market downturns. The index’s fall from a “Greed” reading of 71 to 24 marks a sharp shift in investor outlook. This level of fear mirrors past market cycles, including those observed during Bitcoin’s bear markets in 2018 and 2022. According to Bitwise analysts, such extreme levels of fear are typical signals for potential market bottoms and contrarian buying opportunities.
Bitwise’s research suggests that while market sentiment is at a low point, the underlying conditions may not justify panic. The analysts point to external factors like the US-China trade tensions and a record $11 billion wave of futures liquidations, which they believe have largely exhausted selling pressure. “The forced liquidation event has now meaningfully exhausted selling pressure,” said André Dragosch, director of research at Bitwise. With these external pressures easing, Bitwise sees the current market as a potential entry point for buyers.
Market Conditions and Accumulation
Despite recent price declines, which have caused some market uncertainty, there is evidence that the market may be transitioning toward a phase of reaccumulation. Bitwise points to their internal Cryptoasset Sentiment Index, which has dropped to its lowest levels since past market corrections. Historically, such readings have marked favorable entry points before the market sees seasonal strength, particularly in the fourth quarter.
On-chain data shows that smaller Bitcoin holders, those holding between 1 and 1,000 BTC, have been actively accumulating during the recent downturn. This growing interest from retail and mid-tier investors may provide support for Bitcoin’s price. In contrast, large holders appear to have slowed their buying activity. However, Bitwise analysts note that the overall market sentiment remains cautious, with institutional investors or demand from Bitcoin ETFs potentially absorbing excess supply.
Selling Pressure from Miners and Long-Term Holders
Data from CryptoQuant reveals a large influx of Bitcoin to exchanges from miners, who have deposited around 51,000 BTC in the past week. Such activity typically signals potential sell-side pressure as miners may be preparing to liquidate or hedge their positions. In addition, long-term holders have recently sold a significant amount of BTC, with over 265,000 BTC being sold in the past 30 days, the largest monthly outflow since January 2025.
Despite these factors, Bitcoin’s price has shown relative stability around the $110,000 mark. Bitwise suggests that institutional demand, possibly from ETFs, is likely helping to absorb the extra supply and providing price support. This stability is seen as an encouraging sign that the market may be transitioning from capitulation to a period of reaccumulation, which often precedes bullish market conditions.
