Crypto Sentiment Index Drops to Lowest Level Since February — But Analysts See Reasons for Optimism

Crypto market sentiment has plunged to its most fearful level since February, driven by continued macroeconomic uncertainty and Bitcoin’s struggle to regain key price levels. Still, several analysts believe the negative mood may not last long.

The Crypto Fear & Greed Index — one of the industry’s most widely followed sentiment gauges — posted an “Extreme ear” score of 10 in Saturday’s update, marking its lowest reading since Feb. 27. The drop came as Bitcoin (BTC) slipped below $95,000 on Friday and has yet to reclaim the $96,000 level at the time of writing, according to CoinMarketCap.

The previous February low followed a period of intense selling pressure, including the worst-ever single-day outflows from spot Bitcoin ETFs totaling $1.14 billion, as Bitcoin fell from $102,000 to $84,000 earlier in the month.

Current Sentiment May Appear Worse Than It Actually Is

Market participants often rely on sentiment indicators to understand broader emotions surrounding crypto and to help determine whether conditions favor accumulation or risk-off behavior.

The Crypto Fear & Greed Index hasn’t seen a score this low since Feb. 27. Source: Alternative.me

Despite the alarming reading, Andre Dragosh, Bitwise’s European head of research, says the situation isn’t as severe as past corrections.

In an X post on Friday, Dragosh noted that sentiment appears bearish but not as deeply so as during previous market downturns — even though current prices are lower. He also highlighted that Bitwise’s internal crypto sentiment index is showing early signs of reversal, indicating a potential shift in momentum.

Macro Factors Still Stirring Uncertainty

Although U.S. President Donald Trump recently signed a bill ending the longest government shutdown in U.S. history — an event some traders believed contributed to recent volatility — uncertainty remains around the Federal Reserve’s next move on interest-rate cuts.

Rate decisions often influence risk assets like Bitcoin, making them a key focus for traders.

Analysts Spot Positive Technical Signals

Not all signals point downward. Sven Henrich, founder of NorthmanTrader, told his 503,400 followers that Bitcoin’s chart is showing “something potentially positive” for bulls. He pointed to a falling wedge pattern and positive divergence, both traditionally seen as bullish indicators.

Meanwhile, a Messari research manager known as “DRXL” expressed surprise at the disconnect between crypto fundamentals and current sentiment.

“In eight years working in crypto, I’ve never seen such dissonance between the headlines and the sentiment,” he said. “Everything we once dreamed of is happening, yet it somehow feels… over.”

Some analysts believe the absence of a sharp year-end rally might actually be beneficial.

Matt Hougan, Bitwise’s chief investment officer, recently noted that the biggest risk would have been a massive rally into the end of 2025 followed by a severe pullback — something the market may now be avoiding.

Conclusion

Although the sentiment index is signaling extreme fear, several industry experts point out that the current market backdrop may be less bearish than it looks. With positive technical patterns emerging and macro uncertainties slowly resolving, sentiment could shift more quickly than expected.

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