Bitcoin BTC$83,962.59 sentiment has plunged into extreme pessimism, suggesting a tactical or interim low from which a BTC price bounce is likely, according to analytics firm 10x Research.

The firm's proprietary "Greed & Fear" Index, which measures market sentiment, has crashed to a record low of less than 5 points. Readings below 10% represent extreme fear or pessimism, and above 90% signal green or over-optimism.

More importantly, the 21-day simple moving average of the index has slipped to 10%, a level that has consistently marked tactical lows over the years.

"Our own 10x Greed & Fear Index has been sitting near its lowest possible reading, and the slower-moving average has now reached the 10% zone, a level that often marks a tactical low," Markus Thielen, founder of 10x Research, told CoinDesk.

Peak pessimism does not necessarily signal an immediate end to the downtrend. While prices may continue to decline, the pace is likely to slow, with a tactical low in sight.

"Prices can still fall further, as we saw in March when the indicator bottomed before bitcoin continued to slide into April. Yet, bitcoin still staged a 10% rebound immediately after that initial sentiment low. With sentiment now near rock bottom again, a similar short-term rebound is possible," Thielen explained.

Bitcoin traded near $84,800 at press time, having hit a low of $80,880 on Friday, according to data from CoinDesk. Despite the bounce, prices are still down 10% for the week and 23% for the month.