Recent data from Alpharactal showed the Crypto Fear & Greed Index dropping to 10 at the time of writing. This is the lowest sentiment value of 2025.
Source: Alpharactal
Such extreme fear has only arisen during market resets or at the end of extended price declines. The index has now fallen from the mid-60s to near zero within weeks, similar to the unwinding seen in mid-2021 and mid-2022.
Source: Alpharactal
Additionally, the broader Alpha Crypto Sentiment Gauge shifted from neutral-bullish to bearish and very bearish signals earlier this quarter. That shift kept traders focused on potential capitulation zones.
Institutions bought the dip
Over $19 billion in liquidations and 1.6 million wiped out traders created the perfect setup for major players to absorb supply at lower prices.
Long-term holders have reportedly issued 62,000 BTC since October, much of which flowed into ETFs managed by companies like BlackRock and Fidelity.
Despite panic-driven selling, ETF balances have grown by $24 billion by 2025. This correction could be a structural carryover rather than a cycle top.
A new structure
Continuing the story, Bitwise CEO Hunter Horsley noted in a X message that crypto may already be deep into a six-month bear phase.
He argued that the traditional four-year cycle model no longer applied to a market shaped by ETF flows, regulation and heavyweight institutions.
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In contrast, post-ETF dynamics introduced new mechanical buying and selling patterns that affected volatility.
Despite the recent decline, Horsley maintained that underlying conditions could support one of the strongest recoveries yet.