Matrixport: Crypto Extreme Fear Suggests an Incoming Inflection Point

Cryptocurrency fears are dropping below zero on the Matrixport index, suggesting that selling pressure could be exhausted and a reversal could be near.

Bitcoin sentiment has fallen to its most pessimistic level in years, with Matrixport’s own Greed and Fear Index indicating that selling pressure is almost exhausted.

The financial services provider suggested in its latest analysis that the market could be approaching an inflection point, even as prices face continued near-term uncertainty.

Sentiment drops to a multi-year low

In a chart published on February 17, Matrixport revealed that the Greed and Fear Index has fallen below zero at its 21-day average, a zone that has seemed close to price bottoms in previous cycles.

The model tracks changes in positioning and volatility, and previous examples of similar measurements often occurred shortly before markets stabilized. The note added that prices could fall further before there is any recovery, although historically such pessimistic sentiment has often coincided with what it called “attractive” entry periods.

“Given the cyclical relationship between sentiment and Bitcoin price action, the latest reading suggests the market may be approaching a new turning point,” the company said.

Matrixport also pointed out that traders needed to be cautious as the current environment requires them to “sharpen” their focus in preparation for “conditions that typically precede a meaningful recovery.”

And their call is not unfounded if observable signals such as institutional flows are anything to go by. According to Lookonchain, Bitcoin investment products included another week of outflows, with outflows of $380 million in the last seven days. During that time, BlackRock’s IBIT bled dry 3,538 BTC, closely followed by Fidelity, which withdrew more than 2,000 BTC worth over $143 million.

Additionally, while BTC was trading around the $68,000 level at the time of writing and barely down over the past 24 hours, the King cryptocurrency is down nearly 3% this week, with steeper longer-term declines including a 28% collapse over 30 days and a decline of more than 40% over the past six months, according to data from CoinGlass.

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Matrixport’s analysts are not the only ones who have noticed the unrest in the market. Earlier this month, Alternative.me’s widely followed Fear and Greed Index told a similar story, falling to its lowest level since 2019 after Bitcoin shed about $30,000 from its price in less than 10 days.

Interesting is data shared earlier today by analyst Darkfost be to another pressure point. According to them, open interest on exchanges has steadily declined since the October 2025 market top, with holdings on Binance down around 39% and down around 33% on Bybit and 24% on BitMEX.

“This environment indicates that investors are actively reducing exposure, limiting risk or being forced out through liquidations due to continued volatility,” Darkfost explains. “Under these conditions, it is difficult to imagine that Bitcoin will stabilize sustainably and revive a bullish trend in the short term.”