BTC at Record Levels but Investor Sentiment Still Hovering in Fear - An Unusual Phenomenon

An interesting contradiction is unfolding in the cryptocurrency market: Bitcoin’s price is at an all-time high, hovering around $93,030, but the Crypto Fear & Greed Index continues to flash in the “Extreme Fear” zone for over two consecutive weeks. As of data from December 26, 2025, this index registers at 20, reflecting investor anxiety levels that surpass those during the FTX collapse in November 2022, when Bitcoin was only around $16,000-$20,000.

The Difference Between Today’s Fear and Past Fear

The Fear & Greed Index maintained by Alternative.me is built on analysis of price volatility, trading volume, market dominance ratios, and social media signals. Notably, during the previous FTX collapse, the index only recorded a few brief periods at extreme levels, whereas now, it has remained there for nearly two weeks without signs of reversal.

The main reason is the vastly different market context. In 2022, the collapse of a centralized exchange caused an immediate shock—liquidity evaporated, credit froze, and Bitcoin’s price plummeted within days. Currently, the anxiety is more prolonged, not triggered by a sudden event but by underlying pressures and long-term caution.

Signals from Spot and Derivatives Markets

Spot market data shows trading volume remains relatively subdued compared to the period when ETF products were launched in early 2024, even as Bitcoin approaches its all-time high. This indicates that, despite high prices, buying pressure is not as strong as expected.

In the derivatives market, the situation is similar. The (funding rate) for BTC perpetual contracts has narrowed around the neutral level, even turning slightly negative in recent sessions. The (open interest) has also decreased from previous local peaks, suggesting investors are reducing leverage positions rather than increasing buying leverage.

Macro Pressures and Ongoing Risks

The cryptocurrency market still faces pressures from the macro environment. Interest rates in developed countries remain restrictive compared to post-2010 historical standards. Additionally, regulatory oversight continues to tighten, with authorities increasing enforcement on centralized exchanges and stablecoin issuers.

ETF spot flows for Bitcoin and other assets have appeared, creating an additional capital-raising channel. However, this is not enough to shift sentiment from anxiety to confidence. Many investors remain in a wait-and-see mode, hedging against the possibility of further negative events.

Capital Flow Shifts: Signs of Caution

Aggregated industry data shows tokens related to NFTs have decreased by about 7.4% over 24 hours, while tokens in AI and SocialFi sectors have experienced modest single-digit gains. This is not a sign of a high-risk acceptance market but rather a rotation of capital among different sectors.

Opportunity or Danger?

According to the logic of the Fear & Greed Index, the “Extreme Fear” level is often seen as a warning that investors are overly pessimistic—a phase that may hide buying opportunities. Conversely, “Extreme Greed” usually signals an overheated market. However, the current situation is different: prices are high but sentiment is low, trading volume is weak, yet the fear index flashes at extreme levels for an extended period—this complex picture requires careful analysis before investors decide to act.