A widely used crypto market sentiment indicator has shaken off its “extreme fear” rating as of Friday, returning to its highest levels in 21 days despite still trading under $90,000.
The index, which measures overall crypto market sentiment, recorded a “fear” score of 29 in its Friday update, climbing out of the “extreme fear” zone to its highest level since Dec. 12.
The price of Bitcoin (BTC) is $88,995 at the time of publication.
The rise in sentiment is a positive signal for the crypto community, and some analysts say the long stretch in “fear” or “extreme fear” territory could indicate the market is primed for potential gains.
Crypto risk-reward ‘best it has ever been’
“Risk/Reward is the best it has ever been,” crypto entrepreneur Brian Rose said in an X post on Dec. 28, pointing out that the index has been in fearful territory for eight weeks.
“That’s even longer than the April 2025 crash,” Rose said, referring to the period when the crypto market tumbled following US President Donald Trump’s announcement of global trade tariffs.
Crypto traders often look at sentiment indicators to see what others are doing and to decide when to buy or sell. While times of fear can signal a buying opportunity, when the index swings toward greed, it might be a signal to sell some crypto.
Crypto analytics platform Santiment said that crypto market participants heading into 2026 had “mixed emotions.”
“Some mourn personal losses while others celebrate crypto gains and community resilience,” Santiment said. “The market shows signs of recovery as holders express pride in profits and continued commitment. Events and giveaways boost engagement, reflecting optimism despite recent challenges.”
Other indicators confirm risk-off mode among traders
Other crypto market indicators point to a low risk appetite among investors.
On Friday, the CoinMarketCap Altcoin Season Index posted a “Bitcoin Season” score of 23 out of 100.
Related: Why Luke Gromen is fading Bitcoin while staying bullish on debasement
The index alternates between “Bitcoin Season” and “Altcoin Season” depending on the performance of the top 100 altcoins relative to Bitcoin over the past 90 days.
According to CoinMarketCap, among the top 100 cryptocurrencies, Sky (SKY) experienced the largest drop over the past seven days with a 9.73% decline, while Story (IP) recorded the biggest gain with a 53.47% increase.
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