Bitcoin Sentiment Hits Extreme Low as Analysts Call Potential Bottom at $80K

TLDR

• Bitcoin’s Greed & Fear Index dropped below 5 points, hitting extreme pessimism levels that historically mark tactical market bottoms
• BitMEX co-founder Arthur Hayes says Bitcoin’s bottom may be near at the $80,000-$85,000 range but advises waiting for U.S. stocks to correct first
• Bitcoin fell to a six-month low below $82,000 on Friday after dropping 23% for the month from its late-October peak near $126,000
• The 21-day moving average of 10x Research’s sentiment index reached 10%, a level that has consistently marked tactical lows in previous cycles
• CME FedWatch data shows 71% probability of a 25-basis-point rate cut following Federal Reserve comments about near-term policy changes

Bitcoin dropped below $82,000 on Friday, reaching its lowest price in six months. The decline marks a steep 23% fall for November and a sharp retreat from the cryptocurrency’s late-October peak near $126,000.

Market sentiment indicators have reached extreme levels of pessimism. The proprietary Greed & Fear Index from 10x Research crashed to below 5 points, representing the lowest possible reading on the sentiment gauge.

Readings below 10% on the index signal extreme fear in the market. Readings above 90% indicate excessive optimism. The current level sits at the most bearish point the indicator has recorded.

The 21-day moving average of the sentiment index has also dropped to 10%. This level has marked tactical market bottoms during previous Bitcoin cycles, according to 10x Research founder Markus Thielen.

Market Liquidations Drive Sharp Sell-Off

The price decline triggered forced liquidations across trading platforms. Bitcoin briefly touched $80,880 on Friday before recovering to trade near $84,800 at press time.

BitMEX co-founder Arthur Hayes stated on X that the bottom for Bitcoin may be near. He advised traders to remain patient before buying heavily. Hayes suggested waiting for U.S. stocks to correct alongside crypto markets.

Hayes attributed the recent Bitcoin crash to declining U.S. dollar liquidity. He predicted the price could fall to the $80,000 to $85,000 range before rebounding. His forecast proved accurate as Bitcoin dropped into that zone.

The BitMEX co-founder said more money printing would be needed to spark the next wave of liquidity for Bitcoin. He indicated that artificial intelligence tech stocks would need to fall first before that happens.

Historical Patterns Show Similar Corrections

Raoul Pal highlighted similarities between the current correction and previous crypto cycles. He noted the crowded nature of the market’s position resembles conditions seen in 2021.

Bitcoin experienced multiple large corrections during past bull markets. A 72% drop occurred from 2019 to 2020 during the early pandemic months. Several 30% pullbacks happened in 2016 and 2017 during that cycle’s bull run.

These previous corrections came with little obvious external catalyst. Markets later recovered and pushed to new highs following the steep retracements. Pal sees the current oversold condition matching previous de-risking cycles.

Fed Policy Shifts Impact Market Expectations

CME FedWatch data showed a 71% probability of a 25-basis-point rate cut following recent Federal Reserve comments. Fed official John Williams signaled a near-term rate cut could be coming.

The probability jump came after expectations for a December rate cut had declined earlier in the week. Traders are watching how changing monetary policy affects liquidity conditions for risk assets.

Peter Brandt offered a long-term forecast for Bitcoin. He predicted the cryptocurrency could reach $200,000 but might first drop to $58,000 in the next major cycle. Brandt said this move could happen around the third quarter of 2029.

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