Sentiment in the crypto market has deteriorated sharply. The Greed & Fear index by Matrixport has dropped to extremely low levels. This may indicate that the market is approaching a new turning point.
Nevertheless, Matrixport believes that pressure on bitcoin may persist. In their view, the decline is not yet over, and a further drop is possible ahead.
Sentiment Points to Possible Turning Point for Bitcoin
In a recent market review, Matrixport noted that overall investor sentiment has fallen to extremely low levels. This reflects widespread disappointment across the digital asset market.
The company drew attention to its own bitcoin fear and greed indicator. The report explains that a sustainable bottom usually forms when the 21-day moving average drops below zero and then starts to turn upward. Judging by the chart, this is exactly the picture emerging now.
“This transition indicates that selling pressure is gradually running out, and the market situation is beginning to stabilize,” the publication says.
Greed & Fear index by Matrixport. Source: Matrixport Official
The report also notes that, given the cyclical relationship between investor sentiment and bitcoin dynamics, the current extreme index value may indicate the approach of a new turning point.
At the same time, Matrixport warns that in the short term, prices may still decline.
“While caution remains justified, the current situation increasingly forces us to look more closely at the market and prepare for conditions that usually precede a major rebound,” the company said.
On-Chain Metrics Point to Stress in Bear Market
Additional signals are also coming from the on-chain market. Analyst Woominkyu noted that the adjusted Spent Output Profit Ratio, or aSOPR, has again fallen into the range from 0.92 to 0.94. Previously, this zone coincided with periods of strong pressure during bear phases of the market.
“In 2019 and 2023, similar values were recorded during deep corrections when coins were sold at a loss. Each time, this range reflected market participant capitulation and structural reset,” the publication says.
Adjusted Spent Output Profit Ratio for bitcoin. Source: CryptoQuant
Historically, several market bottoms have formed in the zone from 0.92 to 0.93. According to Woominkyu, the current structure resembles the start of a bear phase more than a typical correction within a cycle.
If the indicator does not return above 1.0 in the near future, this increases the likelihood that bitcoin is entering a broader bear phase rather than just experiencing a local decline.
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The analyst emphasizes that true market bottoms usually form after a deeper compression of aSOPR, a peak in loss realization, and complete exhaustion of selling pressure. The market already looks tense, but there are still no signs of full capitulation.
“aSOPR indicates structural deterioration. This looks more like a change in market regime than a short-term dip. Forming a sustainable bottom may require a deeper compression of the indicator,” the analyst noted.
This view coincides with broader bearish forecasts. Some of them allow for bitcoin to fall below $40,000 before forming a sustainable bottom.
Bitcoin (BTC) price dynamics. Source: CoinMarketCap
Bitcoin is currently trading around $68,000. If the price drops below $40,000, it will be a decline of more than 40% from current levels. This scenario shows how serious a decline some analysts are factoring in.
Sentiment indicators hint at a possible reversal. But on-chain data still looks weaker. The market remains under pressure. Before a sustainable rally begins, sellers may become active again.
