On-chain analytics firm Santiment reports that crypto market sentiment has flipped to 'fear' as traders abandon smaller, riskier altcoins in favor of established cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and XRP. The Crypto Fear & Greed Index dropped to a score of 44 over the weekend, indicating heightened caution among investors.
Santiment's analysis reveals that whale activity successfully pinpointed XRP's recent peak, while extreme crowd fear correctly signaled Cardano's (ADA) price bottom. The firm noted that social media sentiment hit extreme negativity just as tokens like Cardano began rallying—a classic contrarian signal. This pattern suggests that extreme fear creates buying opportunities for contrarian investors monitoring sentiment extremes.
Meanwhile, Bitcoin has diverged from traditional markets in an unusual pattern: stocks edge higher while BTC lags. This divergence could present an opportunity if historical patterns hold, as Bitcoin often catches up to stock market performance when such gaps appear. Bitcoin's Network Realized Profit/Loss metric recently spiked during the price decline, showing healthy capitulation and profit-taking behavior.
The shift away from smaller altcoins toward established cryptocurrencies shows flight-to-quality behavior typical during uncertain market periods. Analysts at Bitfinex suggest renewed momentum in lower-cap assets may not materialize until more crypto ETFs come online later this year. The Altcoin Season Index stood at 56 on Sunday—technically qualifying as 'Altcoin Season' but still reflecting uncertainty.
Prominent traders remain divided on the outlook. Rekt Fencer called this 'the final shakeout for altcoins,' pointing to oversold conditions exceeding those during the COVID crash, FTX collapse, and tariff war. Meanwhile, Michael van de Poppe argued that altcoins are 'extremely undervalued' relative to prior cycles, suggesting 2025 is shaping up to be completely different from earlier market patterns.