According to Matrixport, current sentiment conditions resemble historic moments that previously preceded short-term rebounds. However, while oversold signals are mounting, analysts warn that volatility isn’t over yet.
Sentiment at Deepest Levels in Four Years
Matrixport reported Tuesday that overall crypto market sentiment has fallen to extremely depressed levels, reflecting widespread pessimism across investors.
Their proprietary Bitcoin fear and greed index suggests that “durable bottoms” typically form when the 21-day moving average drops below zero and then reverses higher - a condition that has just occurred.
Historically, similar readings were seen around June 2024 and November 2025, both following sharp market declines. In those instances, sentiment extremes preceded recovery phases.
Meanwhile, Alternative.me’s widely tracked Fear and Greed Index currently sits at 10 out of 100, officially in “extreme fear” territory - its lowest level since June 2022. If Bitcoin closes February in the red, it will mark five consecutive monthly losses, the longest losing streak since 2018 and one of the steepest sustained sell-offs in crypto history.
Bitcoin Reaches Rare Oversold Conditions
Technical signals are also flashing unusual extremes. Frank Holmes, chairman of Bitcoin mining firm Hive, noted that Bitcoin is trading two standard deviations below its 20-day average - an occurrence seen only three times in the past five years.
Being two standard deviations below trend indicates heavy selling pressure and potential seller exhaustion, a classic precursor to mean reversion in volatile markets. Despite the heavy drawdown, Holmes remains confident about the bigger picture:
Inflection Point 0 Or More Pain Ahead?
Matrixport emphasized that while deeply negative sentiment often creates attractive entry points, it doesn’t eliminate the risk of further short-term downside.
Historically, extreme fear marks moments when weak hands exit and long-term investors begin accumulating. However, macro uncertainty, ETF outflows, and tightening liquidity conditions continue to pressure the broader crypto market.
Whether this proves to be the bottom or simply a pause before another leg down remains unclear. What is evident is that Bitcoin sentiment is at rare historical extremes, and such moments have previously coincided with major turning points.
For now, traders are watching closely for confirmation - either a technical rebound or further capitulation.
