Bitcoin Extreme Fear Signals Possible Market Bottom: Matrixport
Crypto market sentiment has plunged to extreme lows — a condition that historically signals a potential market bottom, according to analysts at Matrixport.
In a Tuesday note, the firm said sentiment has fallen to “extremely depressed levels,” reflecting broad pessimism across the market.
Bitcoin fear metric flashes potential bottom
Matrixport’s proprietary Bitcoin fear and greed indicator shows that durable bottoms often form when the 21-day moving average drops below zero and then reverses higher — a setup that is currently unfolding.
According to the firm:
“This transition signals that selling pressure is becoming exhausted and that market conditions are beginning to stabilize.”
However, analysts cautioned that short-term downside risk remains. Historically, though, deeply negative sentiment readings have provided attractive entry points for long-term investors.
Matrixport sentiment metric tweet
Bitcoin sentiment hits four-year lows
Previous periods when Matrixport’s metric reached similar lows occurred around June 2024 and November 2025, both following steep market declines.
Meanwhile, Alternative.me’s widely tracked Fear and Greed Index currently sits at 10 out of 100, signaling “extreme fear” — its lowest level since June 2022.
If Bitcoin closes February in negative territory, it would mark five consecutive monthly losses, the longest losing streak since 2018 and one of the sharpest sustained sell-offs in its history.
Bitcoin enters historic oversold territory
Frank Holmes, chairman of Hive Digital Technologies, noted that Bitcoin is trading roughly two standard deviations below its 20-day average — an extreme condition seen only three times in the past five years.
Historically, such deviations have tended to precede short-term rebounds over the following 20 trading days.
Despite near-term volatility, Holmes remains optimistic:
“Despite the ongoing market jitters, I remain bullish in the long term because the fundamentals still look strong.”
Alternative.me Fear & Greed Index (for sentiment reference)
Inflection point ahead?
Market cycles often show a strong relationship between sentiment extremes and price reversals. While further downside cannot be ruled out, the current readings suggest that seller exhaustion may be approaching.
If historical patterns hold, the market could be nearing another significant inflection point — though confirmation will depend on price stabilization and improving momentum in the coming sessions.
See all our insights: Bitcoin World News
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