In 2026, the crypto market sentiment has been completely torn apart.

On one side, the Fear and Greed Index finally shed the label of extreme fear, and many people are starting to shout "The bull market is here"; on the other side, some investors are sulking over losses in the past eight weeks, even vowing "Never touch crypto again." What do these completely opposite mindsets actually reflect? Are they signals that the market is bottoming out, or a prelude to the next wave of intense volatility?

Santiment's data provides an interesting answer. As we enter the new year, market participants have clearly polarized—some who bought the dip during the fear period suffered heavy losses and have now lost all hope for the trend; others successfully positioned at low levels, with modest gains and full of optimism. This divergence is actually a typical bottoming-out characteristic. Similar scenarios occurred after the sharp decline in March 2020 and at the market bottom of the 2022 bear market.

Why is this happening? Essentially, there are two reasons. First is the difference in entry timing. Investors who started buying during the initial fear in early November, despite experiencing some volatility, are mostly still in profit; whereas those who were scared off during the extreme fear in mid-December and then cut their losses can only watch the rebound unfold. Second is the difference in asset selection. During the quarterly cycle, Bitcoin holders have relatively limited losses, with many already in profit; but investors heavily concentrated in altcoins, especially those betting on small-cap coins, are generally losing money now.