Bitcoin Sentiment Hits Extreme Fear as Analysts Predict Potential Short-Term Rebound

Bitcoin’s market sentiment has plunged to extreme pessimism levels, signaling that a tactical or interim bottom may be forming even as price volatility continues. According to analytics firm 10x Research, its proprietary Greed & Fear Index has collapsed to a record low below 5 points—a range that historically reflects heightened fear among investors. Sentiment readings under 10% are considered extreme pessimism, while levels above 90% typically indicate excessive optimism.

More importantly for analysts, the 21-day simple moving average of the index has dropped to 10%, a zone that has repeatedly aligned with tactical lows for Bitcoin across multiple market cycles. Markus Thielen, founder of 10x Research, told CoinDesk that the current conditions resemble previous sentiment troughs that preceded short-term recoveries.

Thielen noted that while extreme fear doesn’t guarantee an immediate reversal, it usually suggests selling pressure may slow. He referenced a similar scenario earlier this year, when the sentiment indicator bottomed out before Bitcoin continued a brief decline—yet still managed to rally 10% shortly after that initial sentiment low. With pessimism now near historical extremes again, Thielen believes a comparable bounce could unfold.

At press time, Bitcoin was trading around $84,800, recovering slightly from a recent low of $80,880 recorded Friday. Despite the rebound, BTC remains down 10% for the week and 23% for the month, reflecting the broader cooling in market momentum.

For traders, extremely negative sentiment often acts as a contrarian signal. While further downside remains possible, especially in volatile crypto markets, historical patterns suggest that these deep fear readings may set the stage for a short-term Bitcoin price rebound as sentiment begins to stabilize.