Fear & Greed Index Shows Deep Investor Fear

While traditional markets waver under the weight of macroeconomic uncertainties, the crypto ecosystem goes through an unprecedented turbulence zone. Bitcoin falls below 104,000 dollars, dragging all other assets along with it. However, this correction goes beyond the usual volatility. Investor sentiment collapses, switching from optimism to extreme fear in a few days. This sudden reversal marks a major trend break, which could well redefine the market balance in the short term.

Market sentiment switches to extreme fear

The crypto market is going through a period of acute tension . The well-known psychological barometer for investors, the Crypto Fear & Greed Index, has shifted into the “extreme fear” zone, with a score of 21 .

This level marks a clear break from previous weeks, where the indicator was still flirting with the so-called “greed” zone. This reversal reflects increasing distrust that goes beyond price variations alone. Indeed, this drop in sentiment results from a set of converging signals. The daily analysis of six variables reveals a widespread deterioration :

• Volatility : highly elevated, which intensifies uncertainty among participants ;

• Volume and momentum : free-falling, evidence of weakening buying dynamics ;

• Social indicators : sharply declining, according to aggregated platform data ;

• Bitcoin dominance : rising, indicating a flight of capital from altcoins towards BTC ;

• Sentiment surveys : responses point to increased distrust, consistent with the general climate.

Through these on-chain data, the market appears to have switched to a defensive withdrawal phase. The optimistic narrative that prevailed — institutional adoption, ETF advances, Web3 innovation — is now supplanted by a cautionary logic.

Investors reevaluate their positions, often urgently, facing increasing volatility and degraded technical signals. Extreme fear may be a sign that investors are too worried. This could represent a buying opportunity.

A wave of sales : long-term investors liquidate 40 billion dollars

In this already tense climate, a major data point amplified the pressure. Long-term bitcoin holders sold about 405,000 BTC in October, representing nearly 40 billion dollars of outflows.

These massive sales weigh even more on prices as, at the same time, inflows linked to ETFs and DATs (Digital Asset Trusts) only represented a cumulative volume of about 4 billion dollars. This supply-demand imbalance mechanically weakened price support.

Bitcoin thus slid below 104,000 dollars, reaching 101,497 dollars, a decline of 5.6 % for the day and 17.5 % since its all-time high reached in early October. This drop is explained by a combination of factors, including a persistent crisis in DeFi and widespread macroeconomic concerns prompting investors to reduce their risk exposure. On Monday, liquidations reached 1.2 billion dollars, affecting 90 % of the long positions, evidence of the movement’s intensity.

These events raise questions about the immediate future of the market: is the current purge a simple adjustment or the beginning of a more lasting withdrawal phase? Some observers already see it as a signal of upcoming accumulation, assuming long-term investors have exhausted their selling capacity. Once these holders finish selling, or take a pause, a new base could form to allow the bitcoin price to resume upward. However, in the absence of clear catalysts, the market could remain in this weakness zone for several more weeks.