Bitcoin Fear Index Plunges to Yearly Low - Bitwise Calls It Prime Buying Opportunity

Fear becomes fuel as crypto sentiment hits rock bottom

The Crypto Fear & Greed Index just touched its lowest level in 12 months, creating what Bitwise Asset Management describes as a 'generational entry point' for Bitcoin investors.

Market psychology hits extreme fear territory

While traditional investors panic about short-term volatility, seasoned crypto veterans recognize this classic contrarian signal. Extreme fear typically precedes major rallies—because when everyone's selling, who's left to drive prices lower?

Bitwise's research team notes that similar fear levels in past cycles marked ideal accumulation phases. Their analysis shows that buying during extreme fear periods generated returns averaging 180% over the following 12 months.

Of course, Wall Street analysts will tell you to wait for 'clearer signals'—right up until the train has left the station and they're chasing momentum at double the price.

Sometimes the smartest move is buying when everyone else is too scared to look at their portfolios.

Bitwise sees panic as an opportunity

Despite the drop in sentiment, Bitwise analysts argue that selling pressure has likely peaked and that current market conditions may favor accumulation.

André Dragosch, Max Shannon, and Ayush Tripathi from Bitwise explain that recent corrections were largely driven by external factors, such as renewed US–China trade tensions and a record wave of futures liquidations, which saw perpetual futures open interest plunge by nearly $11 billion.

Dragosch commented:

“Our in-house Cryptoasset Sentiment Index has dropped to its lowest level since that period. Historically, such extremes have marked favorable entry points ahead of seasonal strength in Q4.”

Smaller holders accumulate as miners sell

Onchain data reveals that smaller bitcoin holders—wallets with 1 to 1,000 BTC—have increased their accumulation in recent days, helping offset reduced buying from larger investors.

Meanwhile, miner deposits to exchanges have surged, with roughly 51,000 BTC sent since last Thursday, marking the largest inflow since July.

This influx often signals potential sell-side pressure as miners seek liquidity or hedging opportunities.

Long-term holders exit, but price holds steady

Long-term holders have also sold significant volumes, with over 265,000 BTC leaving their wallets in the past 30 days—the largest outflow since January 2025.

However, Bitcoin’s ongoing stability NEAR $110,000 suggests that demand from institutional buyers or ETFs may be absorbing excess supply.

This shift points to a market in transition from capitulation to reaccumulation.

Market outlook remains cautiously optimistic

Overall, Bitwise analysts maintain that the present environment of low sentiment and heightened volatility could offer a contrarian buying window, especially as smaller holders and institutions appear poised to accumulate.