Key Takeaways
What do the current ‘fear levels’ mean for BTC?
The market remains cautious despite the ongoing correction.
Is there a chance of recovery?
If past trends repeat, on-chain data suggests a possible recovery is likely.
Bitcoins [BTC] The mid-week drop below $100,000 raised market fears to the levels of the early 2025 rate wars.
Although the bulls defended $100,000 and recovered slightly at the time of writing, the Crypto Fear and Greed Index (CFGI) improved slightly.
In recent hours, the barometer of market sentiment has shifted from an “extreme fear” level of 23 to a “fear zone” of 27.
This underlined that the broader market was still cautious, but easing somewhat. In recent weeks, BTC has lost 22%, from a peak of $126k to $98.9k, before regaining $100k.
Source: CryptoQuant
But these fear levels also tend to mark local bottoms or huge discounted opportunities. So, is now the right time to ‘buy the fear’ and sell when everyone is ‘greedy’?
Is it time to buy?
Current levels are a steeply discounted opportunity, especially for BTC. According to the valuation model, actual MVRV levels were below 1.5 in early 2025 and past local bottoms by mid-2024.
In contrast, previous readings above 2 indicated an overheated market that surpassed local highs. At the time of writing, the True MVRV stood at 1.38, implying that a recovery could be likely if past trends repeat.
Source: CryptoQuant
Another potential catalyst was standby liquidity. According to CryptoQuant, stablecoin reserves on the Binance exchange reached a nine-month high of nearly $10 billion.
This meant that there was plenty of liquidity that could be injected into the market if sentiment and the macro front improved.
Source: CryptoQuant
That said, most of the recent sell-off has largely been concentrated on the Binance exchange. according to for most market watchers.
Given that the stock market drives most price discovery and momentum, AMBCrypto checked current selling pressure to gauge whether a broader recovery was likely.
At the time of writing, an average of around 3,000 BTC were being sent to the exchange for dumping every day.
While there were signs of a taper, as evidenced by the easing of Exchange Netflow, a sharp decline in the index could confirm renewed buying pressure.
Source: CryptoQuant