Bitcoin Fear Index Hits 7-Month Low

The overall mood across the crypto market has taken a sharp downturn as bitcoin dropped below $106,000 for the first time in more than three weeks, sending shockwaves of caution through investors. On Tuesday, the Crypto Fear & Greed Index plunged by 21 points, landing at a score of 21 out of 100 — officially signaling Extreme Fear. This sudden collapse in market sentiment marks the lowest level recorded in nearly seven months and highlights just how fragile investor confidence has become in the face of volatility surrounding bitcoin and the broader digital asset market.

Throughout Monday, bitcoin experienced intense fluctuations, sliding from an intraday high of over $109,000 to a low of $105,540 before regaining some ground above $106,500. Despite the brief recovery, the 2% daily decline emphasized a growing unease among traders. Many analysts noted that such reactions are often amplified by the market’s dependence on bitcoin’s performance, as bitcoin remains the central barometer of the entire crypto sector’s health. The recent drop in bitcoin has once again reminded participants that sentiment can shift abruptly when bitcoin’s price crosses psychologically important levels.

The last time the index reached such deep fear levels was back in April, when bitcoin and other assets sank following geopolitical uncertainty tied to the U.S. administration’s global tariff measures. During that event, the Fear & Greed Index fell to 18 out of 100, showing that fear in crypto markets often spikes whenever macroeconomic tension influences bitcoin’s trading environment. The recent 21-point plunge — from 42 to 21 in just a day — mirrors that same pattern of panic-driven reactions seen whenever bitcoin loses its upward momentum.

Historically, bitcoin’s relationship with investor psychology has been clear: when bitcoin surges, excitement and “greed” dominate; when bitcoin dips, fear rapidly returns. The index had reached a “Greed” level of 74 earlier in October when bitcoin hovered above $126,000. But after the early-October crash that pushed bitcoin below $110,000, the sentiment swiftly flipped back to fear. Since then, bitcoin’s trading range has kept investors guessing whether the next move will be a rebound or another correction.

Analysts link the recent weakness in bitcoin to several fundamental factors — including shrinking institutional demand, lower blockchain activity, and the Federal Reserve’s cautious monetary tone. Although the Fed recently reduced interest rates for the second time this year, it hinted that further cuts are unlikely in 2025. That stance disappointed crypto traders who had been counting on easier financial conditions to push bitcoin higher.

Institutional demand has also softened: bitcoin-linked exchange-traded funds registered nearly $800 million in net outflows last week, with daily buying volume falling below the amount of newly mined bitcoin for the first time in seven months. This has led many bitcoin enthusiasts to question whether large investors are temporarily stepping back or simply waiting for lower entry points.

Still, optimism hasn’t vanished completely. Veteran bitcoin supporters are looking ahead to “Moonvember” — a nickname celebrating bitcoin’s historic strength in November. On average, bitcoin has gained more than 42% during this month in past years, often marking it as bitcoin’s most profitable period. Despite the current fear, many in the bitcoin community believe that history could repeat itself, transforming panic into opportunity once again.