The Bitcoin market has entered a period of heightened pessimism, with the widely watched Fear & Greed Index dropping to an “Extreme Fear” score of 10—the lowest since February 27.

This sharp decline in sentiment follows Bitcoin’s drop below $95,000, with the price struggling to recover past $96,000 as of publication.

Sentiment index at extreme fear

The last time the index reached similar lows was in late February, a period that coincided with record single-day outflows from U.S. spot Bitcoin ETFs and a price plunge from $102,000 to $84,000.

Despite the current negative mood, some analysts believe the situation may not be as dire as headline numbers suggest.

Analysts see less severe downturn

Bitwise’s European head of research, Andre Dragosh, noted that while the sentiment index is bearish, it does not signal the same level of distress seen in previous corrections, especially given the lower price levels. Dragosh explained:

“Sentiment index is bearish but less so than during previous corrections despite lower prices. Our Cryptoasset Sentiment Index also continues to show a positive divergence.”

Macro factors and market divergence

Uncertainty around the U.S. Federal Reserve’s next interest-rate decision continues to weigh on markets, although President Trump’s recent signing of a bill ending the government shutdown has provided some relief.

Market observers such as NorthmanTrader’s Sven Henrich argue that Bitcoin’s chart is showing signs of a possible bullish reversal, citing technical patterns like a falling wedge and positive divergence.