Matrixport Flags Extreme Bitcoin Fear as Market Inflection Point

Matrixport says extreme Bitcoin fear and oversold signals may point to a market inflection as sentiment hits four-year lows.

Crypto market sentiment has dropped to rare lows, and Matrixport says this shift may mark a turning point for Bitcoin.

The firm reports that fear readings have reached levels that often align with seller exhaustion and early signs of stabilization.

Bitcoin Sentiment Falls to Four-Year Lows

Matrixport stated that market sentiment has fallen to “extremely depressed levels,” reflecting broad pessimism.

The firm’s Bitcoin fear and greed index shows that durable bottoms often form when the 21-day moving average drops below zero and then turns higher.

According to Matrixport, that reversal is now taking place. “This transition signals that selling pressure is becoming exhausted and that market conditions are beginning to stabilize,” the firm said in a note released Tuesday.

Previous readings at similar levels occurred in June 2024 and November 2025. Both periods followed sharp market declines and were later followed by price recoveries.

Historic Oversold Signals Emerge

Matrixport noted that sentiment and price action tend to move in cycles. The firm said the latest data suggests the market may be nearing another inflection point.

However, it cautioned that prices could still decline in the short term. Data from Alternative.me also shows deep fear across the market.

Its Fear and Greed Index recently recorded a reading of 10 out of 100, which indicates extreme fear and matches levels last seen in mid-2022.

Frank Holmes, chairman of Bitcoin mining firm Hive, said Bitcoin is trading about two standard deviations below its 20-day average.

“This is a level we’ve seen only three times in the past five years,” he said.

Related Reading: Metaplanet Doubles Down on Bitcoin With New Equity Strategy

Extended Loss Streak Adds Pressure

Bitcoin is also at risk of closing February in negative territory. If that occurs, it would mark five consecutive monthly losses. This would be the longest losing streak since 2018.

Holmes noted that past oversold conditions often led to short-term rebounds over the following 20 trading days.

He added that while volatility remains, the broader fundamentals continue to support the asset over longer periods.

Matrixport said that deeply negative sentiment readings have historically offered attractive entry points.

The firm maintained that cyclical patterns between sentiment and price action remain intact, and that the current setup may signal a shift in market direction.

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