Crypto market sentiment has dropped to extremely low levels and could lead to a “sustained bottom” that will exhaust selling pressure, according to analysts at a crypto services company Matrixport.
“Sentiment has dropped to extremely depressing levels, reflecting widespread market pessimism,” he added. he said Matrixport in a note on Tuesday.
Matrixport’s own Bitcoin (BTC) “fear and greed index” suggests that “sustainable bottoms” form when the 21-day moving average drops below zero and reverses to the upside, which is currently the case.
“This transition signals that selling pressure is waning and that market conditions are beginning to stabilize.”
However, Matrixport cautioned that prices may continue to decline in the near future. They argue that historically, these deeply negative sentiment readings have offered attractive entry points.
“Given the cyclical relationship between sentiment and Bitcoin price action, the latest reading suggests that the market may be approaching another inflection point,” he said.
Cryptocurrency market sentiment at its lowest level in four years
The previous periods in which the Matrixport Sentiment Index was this low occurred around June 2024 and November 2025, following periods of keen market declines.
Alternative.me’s “Fear and Greed Index” is also at its lowest level since June 2022, with reading out of 10 out of 100 means “extreme fear.”
Related: Bitcoin Drops 22%, Could This Be the Worst First Quarter Since 2018?
If Bitcoin ends February in the red, it will print five straight monthly losses in the longest losing streak since 2018 and one of the steepest, sustained sell-offs in history.
Bitcoin is at historic oversold levels
Frank Holmes, CEO of Bitcoin mining company Hive, he said on Monday that Bitcoin is currently roughly two standard deviations below its 20-day trading norm. “This is a level we have only seen three times in the last five years,” he said.
“Historically, such extremes have favored short-term recoveries over the next 20 trading days,” he explained.
“Despite continued market volatility, I remain optimistic in the long term as fundamentals continue to look strong.”
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