Bitcoin Sentiment Hits Record Low as Contrarian Investors Eye $60K as Potential Bottom

Bitcoin rebounds as sentiment collapses

Bitcoin (BTC) reclaimed the $71,000 level on Monday after crypto market sentiment indicators fell to their most pessimistic readings on record. The rebound followed a sharp wave of fear-driven selling that pushed BTC down toward its yearly low near $60,000.

While some analysts believe the extreme negativity could set the stage for a contrarian bounce, others warn that weakening price structure and growing derivatives selling pressure may still drag Bitcoin lower.

Key takeaways

• Crypto Fear & Greed Index dropped to a record low of 7, signaling extreme fear

• $5.5B in short liquidations above current prices could fuel a squeeze higher

• Bearish futures flow and weak trend structure keep downside risk elevated

Extreme fear historically aligns with market bottoms

MN Capital founder Michaël van de Poppe noted that Bitcoin’s sentiment readings have reached levels historically associated with market bottoms.

Over the weekend, the Crypto Fear & Greed Index briefly fell to 5 before settling at 7, marking its lowest reading since inception. At the same time, Bitcoin’s daily RSI dropped to 15, indicating deeply oversold conditions.

Comparable sentiment extremes were last observed during the 2018 bear market and the March 2020 COVID-19 crash. According to Van de Poppe, such conditions may help Bitcoin stabilize and reduce the likelihood of an immediate breakdown below $60,000.

Liquidation data supports short-term upside potential

Derivatives data from CoinGlass adds weight to the contrarian argument. Bitcoin’s liquidation heatmap shows roughly $5.45 billion in cumulative short liquidations positioned above current price levels if BTC rises by approximately $10,000.

By contrast, a move back to $60,000 would trigger only around $2.4 billion in liquidations. This imbalance suggests that an upside move could force short sellers to cover, potentially accelerating a rebound.

Structural weakness keeps bears in control

Despite improving sentiment signals, Bitcoin’s broader market structure remains weak.

Data from CryptoQuant shows BTC trading well below its:

• 50-day moving average near $87,000

• 200-day moving average around $102,000

This gap indicates a corrective phase following the previous rally rather than a confirmed trend reversal.

CryptoQuant’s Price Z-Score, currently at -1.6, suggests Bitcoin is trading below its statistical mean. Historically, such conditions often lead to extended consolidation or base-building periods rather than immediate recoveries.

Derivatives selling pressure remains elevated

Crypto analyst Darkfost highlighted growing dominance from sellers in the derivatives market. Monthly net taker volume turned sharply negative at -$272 million, while Binance’s taker buy-sell ratio has fallen below 1, signaling aggressive selling.

With futures activity outweighing spot demand, analysts caution that a sustainable rally will likely require stronger spot market participation.

Historical data warns of deeper downside scenarios

Adding a longer-term note of caution, Bitcoin investor Jelle pointed out that previous bear market bottoms have historically formed below the 0.618 Fibonacci retracement.

In the current cycle, that level sits near $57,000. If historical patterns repeat, deeper downside scenarios could extend toward $42,000, though such outcomes would likely require further deterioration in macro or market conditions.

Conclusion: Sentiment suggests a bottom, structure demands patience

Bitcoin’s record-low sentiment readings and liquidation dynamics suggest that $60,000 may represent a near-term support zone, particularly from a contrarian perspective. However, weak trend structure, heavy derivatives selling, and historical precedents argue against complacency.

Until Bitcoin regains key moving averages and sees renewed spot demand, the market remains in a fragile equilibrium—balanced between a potential recovery and the risk of further downside.

See all our insights: Bitcoin World News