Matrixport Warns That Crypto Market Sentiment Has Plummeted to Extreme Lows Creating Potential Durable Bottom in Global Digital Asset Trading

The cryptocurrency market has taken a hit in recent weeks, and sentiment across major digital assets is now at levels not seen in years.

Analysts at Matrixport say this extreme pessimism could be signaling a “durable bottom” for Bitcoin and other key tokens, as selling pressure starts to wane.

“Sentiment has fallen to extremely depressed levels, reflecting broad pessimism across the market,” Matrixport noted in a statement on Tuesday.

The firm’s own metrics suggest that these lows could mark the point where the market stabilizes and begins to recover.

Bitcoin’s Fear and Greed Index Signals Potential Stabilization

Matrixport tracks Bitcoin’s “fear and greed index,” a measure designed to gauge market emotions.

Historically, durable bottoms form when the 21-day moving average drops below zero and then reverses higher.

According to Matrixport, that exact scenario is playing out right now.

“This transition signals that selling pressure is becoming exhausted and that market conditions are beginning to stabilize,” the note explained.

However, analysts caution that this doesn’t mean prices will immediately rebound; short-term declines could still occur.

Extremely Low Sentiment Often Means Attractive Entry Points

Although market moods are dark, past cycles suggest there may be opportunity for investors.

Matrixport highlighted that deeply negative sentiment readings have historically provided attractive entry points for those willing to buy during fear-driven sell-offs.

“Given the cyclical relationship between sentiment and Bitcoin price action, the latest reading suggests the market may be approaching another inflection point,” they said, hinting at potential stabilization or a rebound if historical patterns hold.

Crypto Sentiment Hits Four-Year Lows

This recent drop in sentiment isn’t isolated.

Matrixport’s measure shows sentiment at levels comparable to June 2024 and November 2025—periods that followed steep declines in the crypto market.

Alternative indicators, such as Alternative.me’s “Fear and Greed Index,” also reflect extreme fear, with a current reading of 10 out of 100, the lowest since June 2022.

If Bitcoin closes February in the red, it would mark five consecutive monthly losses, the longest streak since 2018 and among the sharpest sustained sell-offs in history.

Bitcoin Trades at Historic Oversold Levels

Adding to the picture, Frank Holmes, chairman of Bitcoin mining company Hive, pointed out that Bitcoin is roughly two standard deviations below its 20-day trading norm—a level only seen three times in the past five years.

“Historically, such extremes have favored short-term bounces over the subsequent 20 trading days,” Holmes said.

Despite market jitters, he remains optimistic about the long-term outlook, citing strong fundamentals as a reason for sustained confidence.

Historical Context: Oversold Conditions Often Precede Bounces

Bitcoin’s current oversold position, coupled with extremely low sentiment metrics, aligns with prior instances when the market experienced sharp rebounds.

These periods suggest that while the near term may remain volatile, patient investors could find entry points with high potential upside.

The market’s current mood also contrasts with rising institutional interest and adoption in the crypto space, signaling that while fear dominates short-term trading, the underlying ecosystem continues to grow.

What’s Next?

Analysts are watching closely to see if Bitcoin’s low sentiment translates into a durable bottom. Key factors to monitor in the coming weeks include:

• February closing prices and whether Bitcoin ends the month in the red

• Movement in fear-and-greed indices to confirm sentiment recovery

• Market reactions to potential macroeconomic and regulatory news that could influence risk appetite

If historical trends hold, we may see a short-term rebound before the market finds a more sustained recovery path later in the year.

Investors should approach cautiously, balancing the potential for quick gains against ongoing volatility.

Summary

Crypto market sentiment has plunged to extreme lows, with Bitcoin and broader digital assets facing deep pessimism, according to Matrixport.

The firm’s Bitcoin fear-and-greed index indicates a potential “durable bottom,” while Alternative.me’s index reflects extreme fear, comparable to levels last seen in mid-2022.

Bitcoin is trading at historic oversold levels, roughly two standard deviations below its 20-day trading norm, suggesting potential short-term bounces.

Analysts caution that near-term declines are still possible, but historical patterns suggest that these sentiment lows may offer attractive entry points.

The market may be approaching an inflection point, signaling that selling pressure could soon ease and conditions stabilize.