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It should be noted that the sentiment of the cryptocurrency market has deteriorated drastically, as Matrixport’s Greed and Fear index has fallen to very low levels, indicating that the market may be approaching another turning point.
However, Matrixport noted that Bitcoin may see further decline in the coming period.
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Sentiment signals point to a potential turning point for Bitcoin
Matrixport explained in a recent market update that the general trend of sentiment has fallen to its lowest levels, reflecting widespread pessimism in the… The digital asset sector.
The company highlighted its Greed and Fear indicator on Bitcoin, explaining that “sustained bottoms” typically occur when the 21-day moving average falls below zero and begins to rise afterwards. According to the chart, This training seems to have been achieved.
The publication stated that this change indicates that the selling pressure is nearing the end and the market conditions are beginning to stabilize.
The report added that given the cyclical relationship between sentiment and Bitcoin price action, the latest extreme reading may indicate that the market is approaching… A new potential turning point.
At the same time, Matrixport warned that prices It may continue to decline In a short time.
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The company said that if there is still a need for caution, the current environment increasingly forces us to be more focused and prepared for the conditions that typically precede a strong rebound.
Chain indicators indicate bearish market pressures
At the same time, technical indicators confirm the picture of a compressed Bitcoin market. Analyst Wuminq noted that the adjusted pocket ratio (aSOPR) has returned to the 0.92-0.94 range, an area that previously coincided with… Major periods of stress in bear markets.
The publication stated that in 2019 and 2023, the market saw similar readings during deep corrective phases where the currencies were spent at a loss. Each time, this area represents the pressure of surrender and a structural reset.
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Note that historically more cycles of the cycle are formed around the area 0.92 to 0.93. Wumenqiu noted that the current structure resembles previous transitions to withstand market phases rather than routine mid-cycle pullbacks.
If the index fails to recover above 1.0 in the near term, the possibility may be that Bitcoin will enter a broader bearish phase instead of a simple correction.
The analyst said that real market funds tend to form only after further compression in the aSOPR, the peak of loss realization, and the complete exhaustion of selling pressure. Although it appears that the market is entering a pressure zone, it may not yet reflect complete surrender.
The aSOPR indicates a structural deterioration and the situation looks less like a correction and more like a regime change, the analyst added. The real bottom may need more compression before a sustainable reversal is formed.
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This view matches the broader bearish outlook that suggests Bitcoin could return to levels below $40,000 before a substantial bottom forms.
Data from Bin Crypto Markets showed that Bitcoin is currently trading around $68,000. A drop below $40,000 would mean a decline of more than 40% from current levels, highlighting the amount of downside risk that some analysts believe still exists.
Sentiment indicators are now pointing towards… Possible turning pointBut blockchain data shows that structural weakness may need to run its course before recovery can begin.
