The greed index fell to the level it was at during the FTX collapse. Are we close to the bottom?

The Crypto Assets fear and greed index has dropped to a low of 10 points, a level of “extreme fear” that only occurs when the market is under significant pressure, such as the big dump in March 2020 during the pandemic, the FTX collapse in 2022, and the pullback in February 2025.

Data from multiple platforms such as CoinMarketCap and CoinGlass corroborate this status. This index is composed of six indicators, including volatility and market momentum. The designers position it as a contrarian investment barometer rather than a trading suggestion.

Historical data shows that when the index falls below 10 points, it is often accompanied by cyclical lows, but it is not a direct signal of a bottom.

In March 2020, Bitcoin fell 50% to $4,000 in two days, with the index dropping to 8 points. Ultimately, due to the Federal Reserve's zero interest rates and quantitative easing establishing a bottom, it later rose to $60,000.

After the FTX collapse in 2022, the index fell to 12 points, and Bitcoin traded sideways around $15,500 for several weeks until it started to rise after the ETF approval in 2024.

In February 2025, the index also reached 10 points, at which time Bitcoin fell below $86,000. It is worth noting that the $19 billion liquidation in October (19 times that of the previous two crashes) did not trigger extreme panic, while this drop below $90,000, erasing the gains of the year and leading to a $1.1 billion liquidation, pushed the index to 10 points.

The index often hitting the bottom corresponds to a “volatility cluster period,” rather than an isolated fall. Currently, Bitcoin market depth has decreased from 766 million USD at the beginning of October to 535 million USD, making the price more susceptible to large order impacts. Additionally, with a total outflow of 2.3 billion USD from the US spot Bitcoin ETF over three weeks and a redemption of 1.1 billion USD in a single week in November, panic sentiment has further intensified.

But it should be clear: emotional bottom and price bottom are not synchronized. A durable bottom requires the dual conditions of “emotional collapse + stable liquidity.”

The short-term market direction depends on two major catalysts. The Federal Reserve has cut interest rates by 25 basis points in October, and the market expects another 25 basis points cut in December, with continued easing potentially in 2026. Low interest rates should support Bitcoin, but the market is concerned that the speed of economic deterioration exceeds the hedging power of policies.

On the other hand, ETF fund flows are real-time signals. If they stop falling and begin to rise around the FOMC meeting, combined with extreme panic, it may form a mid-term bottom; if fund outflows and liquidity contraction continue, the current panic may only be the midpoint of deleveraging.

Research indicates that extreme panic can easily trigger the herd effect, which can improve volatility predictions, but its predictive ability for future returns is unstable.

However, the experiences of 2020 and 2022 show that such readings often coincide with the profit window for long-term investors to “buy and hold”. It usually takes several months of fluctuations from the emotional low to the trend reversal.

For the market, an index of 10 points is not a “prophecy” of short-term rises and falls, but a signal for long-term investors to pay attention to the market.