Bitcoin’s Extreme Fear Index

A multi-day ‘extreme fear’ reading in a widely-followed sentiment index could signal a potential bottom in bitcoin prices before they move higher in the coming weeks, similar to a previous setup that preceded a 200% rise in BTC.

The Fear and Greed Index, which gauges investor emotions in markets like bitcoin (ranging from 0 for lowest sentiment to 100 for highest sentiment), has exhibited extended ‘extreme fear’ readings as prices fluctuated between the $83,000 and $95,000 levels.

> Bitcoin Fear & Greed Index: EXTREME FEAR!
For the first time since September 2024—when BTC was at $53K—we’re seeing sustained Extreme Fear in the market. Last time this happened, $BTC doubled in the next 3 months. Will history repeat itself?

— Kronos Research 🟠 @KronosResearch March 5, 2025

The index helps to find whether investors are too fearful (indicating a potential buying opportunity) or too greedy (signaling possible market corrections), and acts as a contrarian indicator in the short term. It is constructed from price volatility and momentum, social media sentiment, Google trends data, and bitcoin’s overall market share.

> “Bitcoin’s plunge into ‘Extreme Fear’ on the Fear & Greed Index, its first since September 2024, recalls a critical historical low,” said Vincent Liu, CIO at trading firm Kronos Research, via Telegram. “Back then, Bitcoin’s value doubled over the next three months, suggesting a potential buying opportunity for knowledgeable investors.”

Liu further mentioned, “In light of today’s market volatility, driven by trade tariffs and macroeconomic uncertainties, this moment could represent a prime entry point, assuming global trade tensions settle and overall economic sentiment improves.”

Bitcoin and several major tokens, such as Cardano’s ADA, Solana’s SOL, and XRP (XRP), saw gains after President Trump’s announcement of a U.S. crypto strategic reserve. However, the excitement was brief due to profit-taking amid an absence of concrete plans and a risk-averse sentiment in broader equity markets.

Trump’s trade tariff announcements concerning Canada, Mexico, and China further influenced market dynamics, with traders now looking for more clarity from the upcoming White House Crypto Summit for direction on future positioning.