Bitcoin’s market sentiment has sharply turned negative, as noted by CryptoQuant analyst Axel Adler. On October 16, Adler shared on X that the Comprehensive Sentiment Index of Bitcoin has once again plummeted into the “extremely pessimistic” zone. Despite prices lingering around the cycle peak, investors’ risk appetites are dwindling, and market participation is evidently decreasing.
Understanding the Bitcoin Comprehensive Sentiment Index
The Bitcoin Comprehensive Sentiment Index combines three key indicators to holistically assess the market’s mood. The first component, the Fear and Greed Index, monitors macro-level sentiment shifts and volatility. The second, CoinGecko’s voting metric, reflects short-term inclinations of individual investors. The third layer is a sliding scale, normalizing the previous two indicators over a year’s timeframe for comparative analysis.
The index measures between -100 and +100. Positive extremities signal enthusiasm and potential market bubbles, while negative values indicate panic and capitulation. Adler’s recent chart revealed the index dipping below -70, indicating entrance into a new “Extreme Fear” zone, mirroring stress levels from 2024 and this year.
Contradictory Cycle in Bitcoin
According to Adler, even as Bitcoin prices hover near the $100,000 range, investor behavior has entirely adopted a defensive stance. The analyst noted limited fund inflows, reduced short-term trading volume, and dwindling overall market liquidity. This scenario points to a phase where rally momentum is waning, with investors searching for safeguards against potential corrections.
Past cycles with similar extreme fear phases largely triggered long-term accumulation periods. However, the current scenario indicates both institutional and individual investors maintaining a cautious approach, with risk appetite still at its nadir.
CryptoAppsy data indicates that as of this report, Bitcoin is trading at $110,890, reflecting a 1.40% drop in the last 24 hours. Over the past week, the price of this largest cryptocurrency has declined by 9.01%.