Matrixport said crypto market sentiment has fallen to extreme lows, suggesting Bitcoin may be approaching a potential inflection point after prolonged selling pressure.
“Sentiment has fallen to extremely depressed levels, reflecting broad pessimism across the market,”
Matrixport wrote in a research note.
The firm’s proprietary Bitcoin fear and greed index indicates that durable bottoms tend to form when the 21-day moving average drops below zero and reverses higher, a condition analysts say is now in place.
“This transition signals that selling pressure is becoming exhausted and that market conditions are beginning to stabilise,”
The firm stated, while cautioning that short-term downside remains possible.
Data from Alternative.me shows its Fear and Greed Index at 10 out of 100, marking one of the lowest readings since mid-2022 and reflecting extreme investor fear.
Bitcoin is also trading roughly two standard deviations below its 20-day average, a rare oversold condition that has historically preceded short-term rebounds.
Frank Holmes, chairman of HIVE Digital Technologies, said such extremes have appeared only a handful of times in the past five years and have typically favoured a bounce over subsequent trading weeks, though broader volatility persists.
At the time of reporting, Bitcoin price was $68,368.72.