‘Extreme Fear’ Grips Crypto Market as Bitcoin Whales Sell $600 Million
CoinMarketCap reported that the Crypto Fear & Greed Index has dropped to 20, marking the lowest level in approximately 200 days and entering the 'Extreme Fear' zone for only the second time since 2023. This decline coincides with a significant 21% drop in Bitcoin's price, largely driven by forced closures of leveraged trades, regulatory concerns, and reduced engagement from retail and institutional investors. Historically, extreme fear in the market has often preceded recoveries, but analysts caution that recovery is not guaranteed due to factors like liquidity, regulations, and macroeconomic conditions. The report emphasizes the index as a tool for market preparation rather than a definitive predictor of price movements.
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Crypto Fear & Greed Index Hits 20
On November 5, CoinMarketCap issued a post on X stating that the Crypto Fear & Greed Index has fallen to 20, marking its lowest reading in about 200 days. The index, which ranges from 0 (Extreme Fear) to 100 (Extreme Greed), has only entered the Extreme Fear zone at or below 20 twice since its 2023 inception. These previous occurrences were in March and April of 2025, both of which closely preceded short-term price lows for Bitcoin.
Historical Precedent for Extreme Fear
The recent decline in the index is noteworthy because it indicates that investors are very fearful and increasingly avoiding risk. However, historical data suggests that such extreme market sentiment typically bounces back quickly, even if it takes a longer period for prices to fully recover. This highlights the cyclical nature of market emotions and their implications for price movements.
Bitcoin's Price Decline and Related Trends
Bitcoin's price has fallen by over 21% since its record high earlier in October, dropping from approximately $126,000 to below $100,000. The collapse in sentiment corresponds with this steep drop in Bitcoin's value. Additionally, forced closures of leveraged trades, ongoing concerns about macroeconomic stability, and regulatory uncertainties have further hurt risky investments like cryptocurrency.
For example, large holders reportedly sold off around $600 million worth of Bitcoin over the weekend. Moreover, declining retail and institutional engagement in the market is creating a feedback loop that feeds greater fear. Similarly, many major altcoins are experiencing deeper declines consistent with weakening overall sentiment. Analysts caution that if Bitcoin fails to hold its key support level around $100,000, a deeper price plunge could be possible.
Opportunities Amid Fear
With the Crypto Fear & Greed Index dropping to such a low level, a few opportunities may arise for risk-seeking investors. Historically, when the market sentiment shifts from fearful back to neutral or even greedy, it has sometimes signaled price recoveries. However, it is crucial to note that such recoveries are not guaranteed and depend on factors such as market liquidity, regulatory clarity, institutional investments, and prevailing macroeconomic conditions.
A Sign to Prepare, Not Assume
The Fear & Greed Index falling to 20 should be viewed as a sign for crypto investors to prepare cautiously, rather than to expect an automatic recovery or price spike. While past data shows that bounces often followed such extreme fear, other variables—such as regulation or institutional flows—play a significant role and must align before any significant price rebound occurs.
Disclaimer
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