The sentiment in the crypto market has fallen into “extreme fear” territory as asset prices continue to decline under increasing macroeconomic and geopolitical pressure.
While some investors view such periods as potential opportunities to buy the dip, one analyst suggests that extreme caution does not necessarily provide optimal entry points.
“Bitcoin goes to zero”-search when the all-time high is under extreme market fear
According to the latest data, the Crypto Fear & Greed Index, a widely used sentiment indicator that measures market sentiment on a scale from 0–100, is currently at 9. This marks a slight increase from 8 yesterday and an extremely low level of 5 last week.
Despite the modest increase, today's measurement indicates that the market remains clearly in the “extreme fear” zone.
Meanwhile, investor unease is also reflected in search behavior. Google Trends data shows that searches for “Bitcoin goes to zero” have reached their highest level ever, surpassing previous downturns in the market.
Search interest score reached 100, indicating maximum curiosity among the public and increased concern among participants.
Still, several market analysts believe that periods of extreme pessimism often provide buying opportunities.
Earlier, Santiment pointed out that increases in negative sentiment often occur when prices fall rapidly. According to the analysis firm, widespread predictions of collapse and narratives centered around concepts like “downward,” “selling,” or “going to $0” are often interpreted as signs that retail investors are giving up, as weakened confidence pushes the weakest out of the market.
“And when you see doomsday predictions for cryptocurrency, it is usually the best time to buy the dip,” Santiment stated.
Bitcoin's best returns came during extreme greed, not fear, data shows.
Nevertheless, Nic Puckrin, investment analyst and co-founder of Coin Bureau, questioned the traditional narrative of buying Bitcoin during periods of extreme fear.
“Buying BTC in ‘extreme fear’ is NOT the best choice,” he said.
Puckrin argued that the data complicates the common perception that extreme fear automatically signals an attractive buying opportunity. His analysis shows that when the Fear & Greed index falls below 25, the average 90-day return has historically only been 2.4%.
In comparison, buying during periods categorized as “extreme greed” has yielded significantly better results, with an average 90-day return of up to 95%. The findings suggest that momentum and sustained bullish conditions, rather than maximum pessimism, have historically coincided with stronger future returns.
“The F&G index is nothing more than a backward-looking momentum indicator. It is of little relevance for predicting returns,” he added.
However, several analysts quickly questioned his choice of time frame. Critics argue that a 90-day window is too narrow. A market observer pointed out that while returns may seem modest three months after an extreme fear measurement, the long-term picture tells a very different story.
“You can see that 12 months after extreme fear, Bitcoin has historically averaged over 300% gains. The F&G index is not a 90-day signal. It is a 12-month accumulation warning. You should not feel rich right after buying during extreme fear,” a user responded.
Ultimately, this moment may represent either opportunities or risks, depending on the investor's time horizon and strategy – rather than just sentiment alone.