Bitcoin (BTC) Price: Why Extreme Fear Could Signal the Best Time to Buy

TLDR

• Bitcoin’s Fear and Greed Index fell to 24, marking the lowest sentiment reading in a year and dropping from 71 just last week
• Bitwise analysts believe the selling pressure has peaked and current conditions present a good buying opportunity for investors
• Miners deposited approximately 51,000 BTC worth over $5.7 billion to exchanges since last Thursday, the largest inflow since July
• Smaller Bitcoin holders holding 1 to 1,000 BTC have increased their accumulation during the recent price decline
• Bitcoin traded below $108,800 as U.S.-China trade tensions and regional banking concerns continue to pressure the broader market

Bitcoin dropped below $108,800 as investor sentiment reached its lowest point in twelve months. The Crypto Fear and Greed Index fell to 24, placing the market firmly in “Fear” territory.

Just one week ago, the same index showed a reading of 71, indicating “Greed.” The rapid decline in sentiment mirrors previous market cycles from 2018 and 2022. The current fear level also matches conditions seen in April when Bitcoin briefly dropped below $74,000.

The price decline came as U.S.-China trade tensions escalated. President Donald Trump confirmed the two nations are in a trade war. These geopolitical concerns spread across global markets, triggering broad risk aversion among investors.

Regional banking issues added to market pressure. Zions Bancorp and Western Alliance Bancorp disclosed bad loans tied to fraudulent activities. These revelations weighed on U.S. stock markets, which then affected crypto prices.

Bitcoin futures markets experienced major turbulence. Perpetual futures open interest dropped by nearly $11 billion, marking the strongest decline on record. This liquidation event forced many leveraged positions to close.

Accumulation Phase May Be Starting

Bitwise analysts André Dragosch, Max Shannon, and Ayush Tripathi argue the worst may be over. They compare the current situation to the Yen carry trade unwind from August 2024. That event also created a sharp but temporary price decline.

The research team’s Cryptoasset Sentiment Index dropped to levels not seen since that August period. Historical data shows these extreme fear readings often precede price recoveries. The analysts believe Q4 could bring seasonal strength to Bitcoin markets.

Onchain data from Glassnode shows smaller holders are buying. Wallets containing 1 to 1,000 BTC increased their accumulation recently. This suggests retail and mid-tier investors see value at current prices.

However, miners moved substantial amounts to exchanges. Since last Thursday, they deposited roughly 51,000 BTC to trading platforms. This represents the largest miner inflow since July and often signals upcoming selling pressure.

Long-term holders also appear to be exiting positions. Data indicates 265,715 BTC was sold over the past 30 days. This marks the largest monthly outflow since January 2025.

Market Holding Key Support Levels

Despite the selling pressure, Bitcoin maintained stability around $110,000 before the recent drop. This price action suggests institutional buyers or ETF demand may be absorbing available supply. The world’s largest cryptocurrency has shown relative strength compared to equity markets.

Min Jung from Presto Research noted the crypto market continues reacting to trade war headlines. Trump’s comments had particularly strong effects on price movements. Jung expects Bitcoin to remain sensitive to developments in the U.S.-China trade situation.

Vincent Liu from Kronos Research said Bitcoin and Ether held up better than equities. However, he warned that thin liquidity and high leverage make the market vulnerable to sudden sentiment shifts. Liu observed some dip-buying activity but described trader confidence as selective rather than full conviction.

Nick Ruck from LVRG Research outlined potential scenarios for Bitcoin. A worst-case outcome could push prices below $100,000 if macro conditions deteriorate. However, Federal Reserve rate cuts or new spot crypto ETF approvals might trigger a Q4 rebound.

Google search interest for Bitcoin fell to a multimonth low. This decrease in public attention typically occurs during bearish market phases. The combination of reduced search activity and extreme fear readings characterizes previous market bottoms.

Bitcoin traded at $108,757, down 1.57% over 24 hours. Ether dropped 1.5% to $3,928, falling below the $4,000 level.

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