The recent crash in the Bitcoin and crypto market has shifted sentiment negatively, with bears dominating the scene. The Fear & Greed Index has been steadily declining over the past month, hitting new lows. The Bitcoin price drop to $53,000 last week led the Crypto Fear & Greed Index to levels not seen since the FTX crypto exchange collapse in November 2022.

Decline in Crypto Fear & Greed Index

Currently, the Crypto Fear & Greed Index sits at 28, reflecting a move into Fear territory after a period of Greed in 2024. This decrease indicates a reluctance among investors to engage in the market, anticipating further price drops.

Comparing the current market sentiment to the past, the last time the Crypto Fear & Greed Index was as low as 28 was post the FTX crash in November 2022 when Bitcoin fell to $16,000.

Despite efforts to keep the Index above 30, the market seems engulfed in bearish pressure, likely pushing it into the Extreme Fear territory for the first time in two years.

Potential for Bitcoin Recovery

Although a Fear-based Index at 28 may deter investors, history suggests a turnaround may be on the horizon. Typically, hitting Extreme Fear levels often signals the market bottom, as seen during the November 2022 plunge to $16,000.

Following a period of consolidation, the market historically picked up, with Bitcoin surging over 250% post the 2022 decline to reach new highs in 2024. If this trend persists, a new bull run could be imminent after the accumulation phase.

As of now, the Bitcoin price shows signs of recovery, currently at $57,200, despite an 8.8% drop in the past week. This bounce from lows below $54,000 over the weekend suggests a potential turnaround.