Bitcoin’s Fear Index Plummets-But Why Not Panic? 🚨

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Key takeaways:

  • Bitwise analysts argue that selling pressure has likely peaked, and that dips may be good buying opportunities. 🤡 “Because nothing says ‘I’m a genius’ like buying when everyone’s crying.”

  • Smaller BTC holders are accumulating even as miners increase exchange deposits. 🎯 “Because 1 BTC is the new 100,000.”

Recent weakness in Bitcoin (BTC) price appears to have dampened enthusiasm, with Google search interest for the asset falling to a multimonth low. 🐱 “Google searches are down, but don’t worry-the real experts are still watching. Or maybe they’re just busy watching cat videos.”

CryptoMoon reported the Crypto Fear and Greed Index has fallen to a “Fear” level of 24, its lowest in a year, down sharply from last week’s “Greed” reading of 71. This decline echoed sentiment levels seen in April, when Bitcoin briefly dipped below $74,000, and parallels previous cycles of market fatigue in 2018 and 2022. 😬 “Ah, the same old story. Remember 2018? When everyone was like, ‘This is the end!’ and then… nothing.”

Panic could be an opportunity in Bitcoin: Bitwise

Despite the sharp sentiment drop, Bitwise analysts believe the current setup favors accumulation, not retreat. Director and head of research André Dragosch, senior research associate Max Shannon, and research analyst Ayush Tripathi said that the recent correction was driven largely by external factors, including renewed US-China trade tensions that triggered broad-based risk aversion across global markets. 🤷‍♂️ “External factors? Like the universe deciding to hate us?”

Bitwise’s weekly crypto market compass report mentioned that the correction was amplified by a record wave of futures liquidations, with Bitcoin’s perpetual futures open interest plunging by nearly $11 billion, “the strongest decline on record.” 🚀 “Futures liquidations hit record levels. So, the market’s like, ‘We’re all going to hell, but let’s do it in style.’”

Dragosch said that this forced liquidation event has now “meaningfully exhausted selling pressure,” setting the stage for a contrarian buying window similar to the Yen carry trade unwind in August 2024. 💸 “Remember the Yen carry trade? Because it’s definitely not on my list of things to remember.”

“Our in-house Cryptoasset Sentiment Index has dropped to its lowest level since that period,” the analyst said, adding, “Historically, such extremes have marked favorable entry points ahead of seasonal strength in Q4.” 🎯 “Favorable entry points? Or just a really good time to bet on a coin that’s been in the same place since 2017?”

Smaller Bitcoin holders step up amid miner pressure

Onchain data supported this view. Glassnode reported that smaller Bitcoin holders, ranging from 1 to 1,000 BTC, have ramped up accumulation in recent days, offsetting reduced buying from large holders. This pattern suggested renewed confidence from retail and mid-tier investors, even as market volatility persists. 🧘‍♂️ “Smaller holders are buying, which is great. Because nothing says ‘I’m a big investor’ like buying 1 BTC.”

However, other indicators paint a more complex picture. CryptoQuant data showed that since last Thursday, miners have deposited roughly 51,000 BTC (worth over $5.7 billion) to exchanges, marking the largest inflow since July. Such activity often precedes sell-side pressure, as miners typically move holdings to exchanges to liquidate or hedge positions. 🤔 “Miners are moving BTC to exchanges. Because nothing says ‘I’m a responsible miner’ like putting your coins in a safe place. Or maybe they’re just trying to sell.”

Similarly, long-term holders might also be exiting their positions, as data indicated that 265,715 BTC has been sold over the past 30 days, the largest monthly outflow since January 2025. 🏖️ “Long-term holders are selling, which is probably a good sign. Or maybe they just needed a vacation.”

Nonetheless, Bitcoin’s stability around the $110,000 level indicated that institutional or ETF demand may be absorbing the excess supply. Together, these opposing flows suggest the market is transitioning from capitulation toward reaccumulation, a setup Bitwise analysts view as the foundation for a bullish Q4. 🧘‍♂️ “Stability at $110k? That’s just the market taking a deep breath. Or maybe it’s just pretending to be calm.”

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2025-10-16 20:36