Crypto Market Sentiment Plunges Into Extreme Fear – Golden Opportunity or Major Warning Sign?

Jakarta, Pintu News – The Crypto Fear & Greed Index fell to 5 on Thursday (12/2), signaling a sharp deterioration in market sentiment as crypto asset prices continued to fall.

The decline reflects growing panic among investors, with risk appetite continuing to wane amid broader global market uncertainty.

Crypto Sentiment Sinks Deeper into the “Extreme Fear” Zone

The Crypto Fear & Greed Index measures the overall emotional state of the crypto market in a range of 0 to 100. A score of 0-24 is categorized as Extreme Fear, 25-49 as Fear, 50 indicates neutral, 51-74 reflects Greed, and 75-100 signifies Extreme Greed.

Read also: XRP Price Prediction: Break-Even Signal Emerges Amid Market Reset Phase

At 5, this index puts the crypto market very clearly in the Extreme Fear zone. This latest drop comes after several consecutive weeks where market sentiment has continued to weaken.

About a month ago, the index was still at 26, which was already in the Fear category. The number then dropped to 12 a week ago, and stood at 11 just a day before falling to its current lows. The pace of this slump shows how quickly market participants’ confidence is collapsing as crypto asset prices continue to fall.

The plunge in crypto market sentiment coincides with rising global economic jitters reflected in the World Uncertainty Index, which measures how often the word “uncertainty” appears in country reports compiled by the Economist Intelligence Unit.

The index covers more than 140 countries and is published every quarter. It is widely used in macroeconomic research and global risk analysis as a cross-country indicator.

In the third quarter of 2025, the World Uncertainty Index jumped to a record high, breaking the 100,000 mark. In the fourth quarter, the index stood at 94,947.

This level is roughly double the peak of uncertainty seen in previous major crises, including the COVID-19 pandemic, Brexit, and the Eurozone debt crisis.

“Heightened geopolitical tensions, market volatility and policy uncertainty are driving this surge, as investors struggle to predict what will happen next,” Coin Bureau wrote.

These high index numbers indicate growing global anxiety across a range of markets, as investors grapple with unpredictable economic and political conditions. In that context, the crypto market’s fall into the Extreme Fear zone reflects not only a drop in prices, but also a retreat in appetite for risky assets around the world.

Crypto market capitalization to fall 22% by 2026, Bitcoin and Ethereum continue to weaken

Investors’ decision to stay away from risk comes as the crypto market continues to move downward. Throughout 2026, the total crypto market capitalization has shrunk by more than 22%, erasing the optimism that was strong at the beginning of the year.

Bitcoin (BTC), which started January in a stronger position, ended the month with a correction of more than 10%. So far in February, the price has continued to fall by around 14.6%.

Ethereum (ETH) has not escaped the pressure either, with a decline of around 33.8% since the beginning of the year. This sustained correction suppressed market activity and worsened the sentiment of participants in the crypto ecosystem.

Read also: Ethereum Price Held at $1,900 Today: ETF Outflows Increase, ETH on the Edge?

Analysts weigh in on the next direction of the crypto market

Amidst the current bear market conditions, the crypto community is still filled with uncertainty about the market’s next move. Analyst Kyle Chassé alluded to historical patterns, noting that the current depressed levels of sentiment in the Crypto Fear & Greed Index have also occurred in 2018, March 2020, and after the FTX collapse in 2022.

“Whenever that happens, it’s always a big window of opportunity. No, it’s not a guarantee that it’s a bottom. But historically, the peak of fear is where asymmetric opportunities arise,” he said.

Other analysts argue that the current decline could be a shakeout phase before a potential breakout occurs. However, there is no certainty as to when – or even if – a major crypto market recovery will actually follow.

Ray Youssef, CEO of NoOnes, projects that Bitcoin could move sideways until the summer of 2026. He emphasized that the exact position of Bitcoin’s bottom is still unclear, and the current dynamics further indicate that the market has entered a long risk reassessment phase.

Youssef highlighted a number of structural factors, including the political and monetary cycle in the US, prolonged inflationary pressures, weakened retail capital flows, as well as the cautious attitude of institutions after bearing heavy losses.

According to Youssef, such a rebound could be quite strong, in the range of 20% to 30%, and might last for quite some time. He warns, however, that such a rally could eventually become a bull trap.

He added that historically, crypto markets tend to be in a long accumulation phase within a price range before entering the start of a true bull market.

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*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying and selling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• BeInCrypto. Crypto Market Sentiment Falls Into Extreme Fear: What Does It Mean for Investors? Accessed on February 13, 2026