Bitcoin Crashes To 'Extreme Fear' — But History Shows That's Not A Buy Signal

Core Insights - Bitcoin's Fear Index has dropped to 12, indicating extreme fear, but historical patterns suggest this level rarely signifies a true market bottom [2][3][4] - Historical data shows that when the Fear Index falls below 10, Bitcoin's median 30-day return is only 2.1%, with 63% of those periods ending positively but with modest gains [5][6] Market Sentiment - Current sentiment is deeply negative, with traders indicating a bottom, yet historical behavior suggests that fear phases tend to persist rather than reverse quickly [4] - Heavy outflows from exchanges, totaling over $3.6 billion since November 10, reflect a risk-off positioning among traders [8][9] Technical Analysis - Bitcoin is trading below a year-long trendline that previously supported major rebounds, indicating structural weakness in the market [11] - The loss of the $100,000 psychological support level further confirms this structural break [12]