Bitcoin (BTC) Price: Why Extreme Fear Could Signal the Best Time to Buy

Bitcoin Sentiment Hits Lowest Point in a Year Amid Market Turmoil

Bitcoin’s Fear and Greed Index has plummeted to 24, marking the lowest sentiment reading in a year and a stark drop from 71 just last week. This sharp decline signals a shift from “Greed” to “Fear” territory, reflecting growing unease among investors.

Market Conditions and Price Movement

Bitcoin traded below $108,800 as escalating U.S.-China trade tensions and regional banking concerns exert continued pressure on the broader financial markets. The geopolitical tensions were intensified after President Donald Trump confirmed that the two nations remain in a trade war, which triggered widespread risk aversion.

Additionally, revelations of bad loans tied to fraudulent activities at Zions Bancorp and Western Alliance Bancorp further weighed on U.S. stock markets, with negative spillover effects on cryptocurrency prices.

The cryptocurrency experienced significant volatility, with Bitcoin futures markets facing turbulence. Perpetual futures open interest saw a record drop of nearly $11 billion, forcing many leveraged positions to liquidate.

Accumulation Signs Despite Selling Pressure

Analysts from Bitwise—André Dragosch, Max Shannon, and Ayush Tripathi—suggest that the worst of the selling pressure may be behind us. They draw parallels to the Yen carry trade unwind in August 2024, which caused a sharp but temporary price decline. Their Cryptoasset Sentiment Index has fallen to levels not seen since that event, suggesting that extreme fear often precedes a market recovery.

Supporting this view, on-chain data from Glassnode indicates that smaller Bitcoin holders, specifically wallets containing between 1 and 1,000 BTC, have increased their accumulation amid the recent price decline. This trend points to growing confidence among retail and mid-tier investors who see value at current price levels.

However, miner behavior presents a contrasting narrative. Since last Thursday, miners have deposited approximately 51,000 BTC worth over $5.7 billion to exchanges—the largest inflow since July. Such sizable miner transfers often signal impending selling pressure.

Additionally, long-term holders have been exiting positions, with data showing 265,715 BTC sold over the past 30 days—the largest monthly outflow since January 2025.

Market Resilience and Future Outlook

Despite the heavy selling, Bitcoin showed relative stability around the $110,000 mark before the recent dip, which suggests that institutional buyers or ETF demand may be absorbing much of the available supply.

Industry experts highlight ongoing market sensitivities:

– Min Jung from Presto Research emphasized that Bitcoin continues to react strongly to U.S.-China trade developments, with presidential comments notably influencing price movements.

– Vincent Liu of Kronos Research noted that Bitcoin and Ether have fared better than equities but cautioned that thin liquidity and high leverage could lead to sudden shifts in sentiment. He observed some dip-buying activity but described trader confidence as cautious.

– Nick Ruck from LVRG Research outlined potential scenarios for Bitcoin’s near-term price action. A worst-case outcome could see prices fall below $100,000 amid worsening macroeconomic conditions. Conversely, potential Federal Reserve rate cuts or approvals of new spot crypto ETFs may spark a rebound in Q4.

Additionally, Google search interest for Bitcoin has dropped to a multi-month low, a pattern typically seen during bearish market phases and prior market bottoms, further confirming the current cautious sentiment.

Current Price Snapshot

As of the latest trading, Bitcoin is priced at $108,757, down 1.57% over 24 hours. Ethereum (Ether) also declined 1.5%, falling below the $4,000 threshold to $3,928.

Conclusion

While Bitcoin faces considerable headwinds from geopolitical tensions and market uncertainties, accumulating signals from smaller holders and the potential for supportive catalysts suggest that conditions may be setting the stage for a recovery. Investors should remain attentive to evolving macroeconomic factors and market sentiment in the coming months.
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