Crypto financial services platform Matrixport reported on October 20, 2025, that Bitcoin's Fear and Greed Index has plummeted to 9%, entering the extreme fear zone below the 10% threshold. Concurrently, broader market data shows the index at a score of 22, indicating a return to fear territory. According to Matrixport's analysis, such low sentiment levels historically serve as a precursor to short-term rallies and price reversals, potentially acting as a bullish indicator.
Historical patterns reveal that fear-driven phases have consistently aligned with Bitcoin's cycle bottoms, often triggering substantial price surges. For instance, in March 2023, fear sentiment preceded a rally from around $20,000 to over $30,000, and similar conditions in September 2023 led to an over 180% surge to $73,000. More recently, between March and April 2025, Bitcoin entered a fear phase that was followed by a powerful surge from $76,000 to over $120,000. Data indicates that fear readings between 20 and 30 have frequently marked accumulation points before rallies of 50% to 100% or higher.
However, caution persists as the index's 21-day moving average shows no clear signs of stability, and Bitcoin's price remains below this average. Additionally, a net outflow of approximately $1.2 billion from Bitcoin ETFs last week has contributed to market uncertainty. Analysts note that while structural indicators align with past bullish reversals, investors should maintain a cautious stance unless new macroeconomic or policy catalysts emerge. Experts emphasized, "Periods of extreme panic can often bring about opportunities for accumulation." Market data shows fear has persisted for 298 days in 2025, accounting for 10.65% of the year, with neutral and greed sentiment spanning longer periods.
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