Crypto market sentiment has fallen to extreme lows, a condition that has historically preceded short-term rebounds, according to analysts at Matrixport, though they caution further downside remains possible.
“Sentiment has fallen to extremely depressed levels, reflecting broad pessimism across the market,” said Matrixport in a note on Tuesday.
Matrixport’s own Bitcoin (BTC) “fear and greed index” suggests that “durable bottoms” form when the 21-day moving average drops below zero and reverses higher, which is currently the case.
“This transition signals that selling pressure is becoming exhausted and that market conditions are beginning to stabilize.”
However, Matrixport cautioned that prices could still fall further in the near term. Historically, these deeply negative sentiment readings have offered attractive entry points, they said.
“Given the cyclical relationship between sentiment and Bitcoin price action, the latest reading suggests the market may be approaching another inflection point,” it stated.
Crypto market sentiment at four-year lows
Previous periods when the Matrixport sentiment metric was this low were around June 2024 and November 2025, following periods of steep market declines.
Alternative.me’s “Fear and Greed Index” is also around its lowest level since June 2022, with a reading of 10 out of 100 indicating “extreme fear.”
Related: Bitcoin down 22%, could it be the worst Q1 since 2018?
If Bitcoin closes February in the red, it will print five straight monthly losses in the longest streak since 2018, and one of the steepest sustained sell-offs in history.
Bitcoin is at historic oversold levels
Frank Holmes, chairman of Bitcoin mining firm Hive, said on Monday that Bitcoin is now roughly two standard deviations below its 20-day trading norm. “This is a level we’ve seen only three times in the past five years,” he said.
“Historically, such extremes have favored short-term bounces over the subsequent 20 trading days,” he explained.
“Despite the ongoing market jitters, I remain bullish in the long term because the fundamentals still look strong.”
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