The Bitcoin Fear & Greed Index has fallen to 25, indicating a period of ‘Extreme Fear’ in the market as Bitcoin slid below $90k for the first time since August 2024.
However, the last time Bitcoin reached this level, it preceded a 78% surge to around $88k by November. When Bitcoin was last around $88k, the Fear & Greed Index hit 73, denoting ‘Greed.’
Thus, just five months ago, Bitcoiners felt greedy buying at $88k; now, they appear to have an extreme fear of the return to such heights.
The chart below showcases Bitcoin’s meteoric rise over the past 18 months, from the bullish sentiment created by BlackRock’s initial spot ETF filing to its acceptance and launch and Donald Trump’s victory in the 2024 election, which resulted in Bitcoin finally breaking through $100,000.
Bitcoin has not remained within an ‘Extreme Fear’ zone for long. It has usually taken less than two months to recover from Extreme Fear to Greed, and each time, it went on to record a new all-time high. However, during the 2022 bear market, it took over a year to recover similarly.
Jeff Park, Head of Alpha Strategies at Bitwise, commented,
“I’ve seen this movie too many times.
People wish for lower prices. When they get them, they lose faith and find new reasons to doubt.
Then it rips. By the time they convince themselves to buy, it’s already at new ATHs.
Losers wait for confirmation while winners act before it.”
