Crypto Sentiment Reaches Historically Low Levels

Capitulation often precedes market reversals. As crypto sentiment sinks into extreme fear, Matrixport believes bitcoin could be approaching a potential bottom. In a recent analysis, the firm highlights that several sentiment indicators and technical signals converge towards a historically sensitive zone. Simple excess pessimism or a true end-of-cycle signal ? At a time when volatility intensifies, this diagnosis deserves special attention.

A sentiment indicator at a low

Matrixport highlights a marked deterioration of its internal indicator. The firm points out that the 21-day moving average of its sentiment index has dropped below 5 %, a level historically associated with market lows, while the market stabilizes without volume recovery.

It indicates that this configuration “suggests that the market could be nearing an inflection point”.

More precisely, the analysis relies on several quantified observations :

• The 21-day moving average of crypto sentiment has fallen below 5 % ;
• The Crypto Fear & Greed Index operates in the “extreme fear” zone ;
• This type of reading has already been observed during capitulation phases.

Matrixport specifies that these levels reflect widespread pessimism and intense selling pressure. The company does not talk about an immediate rebound but identifies a zone where sellers could gradually tire out.

Rarely observed technical conditions

Beyond sentiment, Matrixport draws attention to bitcoin’s technical configuration. According to the analysis, BTC currently trades about two standard deviations below its short-term moving average, a situation historically associated with oversold conditions. The firm notes that this configuration “could pave the way for a rebound”, while warning that price weakness may persist in the short term.

The analysis adds that in the event of a negative monthly close, bitcoin would record a fifth consecutive decline, a sequence comparable to the toughest phases of the 2018 bear market. This prolonged dynamic increases psychological pressure on investors and intensifies the climate of distrust.

Altogether, this paints a potentially pivotal moment for the crypto market. While sentiment and oversold signals converge, they do not guarantee an immediate reversal. Rather, they mark a statistically sensitive zone, where crypto cycle history calls for both vigilance and caution.