Coin Fear Index Rises, Bitcoin Market Sentiment Shifts to Extreme Weakness

The coin fear index, the most intuitive indicator of market sentiment, is revealing investors’ anxiety. Currently, Bitcoin is trading around $70,930, down approximately 44% from its all-time high of $126,080, clearly signaling a severe deterioration in investor confidence. Notably, over the past 12 months, more than 30% of the measured fear index readings have been in fear or extreme fear zones.

Extreme Market Fear Evident in Indicators

The coin fear index expresses investor psychology on a scale from 0 to 100, and it has recently entered a bearish territory around the 50 mark. This indicates that fear has been dominating the market since the liquidation crash in October last year. At that time, Bitcoin plunged 36% from its October peak, and this psychological shock continues to influence the market today.

Interestingly, the U.S. stock market shows similar polarization. Despite the S&P 500 trading near 6,827, just a few percentage points below its all-time high, CNN’s Fear & Greed Index remains at a fear level of 42. This suggests a significant disconnect between objective price levels and investor sentiment.

Technical Death Cross as an Paradoxical Signal

Technical signals on Bitcoin charts also support the bearish outlook. Around November 21, Bitcoin formed a so-called death cross pattern, with the 50-day moving average crossing below the 200-day moving average near a local low of about $80,000. While this pattern is generally seen as a bearish sign, an interesting aspect is that all death crosses in the current cycle since 2023 have coincided with important local lows.

This suggests that, paradoxically, death crosses in this cycle may serve as contrarian trading signals, indicating extreme fear while simultaneously warning of a bottom.

Geopolitical Tensions Amplify Volatility

Another recent factor driving market volatility is geopolitical news. After U.S. President Donald Trump announced a five-day halt on attacks against Iran’s energy infrastructure, Bitcoin recovered to $70,000, maintaining most of its gains. This demonstrates how closely the global macroeconomic environment is linked to the cryptocurrency market.

During the same period, major altcoins like Ethereum, Solana, and Dogecoin rose about 5%, aligning with the broad rally in the stock market. The S&P 500 and Nasdaq gained approximately 1.2% each, signaling a recovery in risk appetite across asset classes.

Investor Decision-Making at a Crossroads

Future scenarios presented by analysts remain uncertain. The next move for Bitcoin is largely seen as dependent on oil price trends and the stability of oil shipments through the Strait of Hormuz. In an optimistic scenario, prices could test the $74,000 to $76,000 range again, but in a pessimistic outlook, further declines into the mid-$60,000s cannot be ruled out.

With the coin fear index continuing to signal weakness, investors need to maintain a balanced approach—avoiding being swayed by short-term volatility while closely monitoring macro risks. Given the complex interplay of technical signals, market psychology, and geopolitical factors, risk management and position sizing are more critical than individual predictions at this stage.