A widely used crypto market sentiment indicator shook off its “extreme fear” rating on Friday, returning to its highest level in 21 days, even though it remains to be trading below $90,000.
The index, which measures overall crypto market sentiment, recorded a “fear” rating of 29 in its Friday update, climbing out of the “extreme fear” zone to its highest level since December 12.
The price of Bitcoin (BTC) is $88,995 on the time of publication.
The rise in sentiment is a positive signal for the crypto community, and a few analysts say the long period within the “fear” or “extreme fear” range could indicate that the market is primed for potential gains.
Crypto risk-reward ratio “the very best it’s ever been”
“The risk-reward ratio is pretty much as good because it’s ever been,” crypto entrepreneur Brian Rose said in an X post on December 28, noting that the index has been in scary territory for eight weeks.
“This is even longer than the April 2025 crash,” Rose said, referring to the time when the crypto market plunged following U.S. President Donald Trump’s announcement of worldwide trade tariffs.
Crypto traders often have a look at sentiment indicators to see what others are doing and to come to a decision when to purchase or sell. While times of fear can signal a buying opportunity, if the index swings towards greed, it might be a signal to sell crypto.
The Crypto Fear & Greed Index has been in scary territory because the starting of November. Source: alternative.me
Crypto analytics platform Santiment said crypto market participants have “mixed emotions” heading into 2026.
“Some mourn personal losses, while others have fun crypto gains and community resilience,” Santiment said. “The market is showing signs of recovery as holders take pride of their profits and continued engagement. Events and giveaways increase engagement and reflect optimism despite recent challenges.”
Other indicators confirm traders' risk-off mode
Other crypto market indicators suggest low risk appetite amongst investors.
On Friday, the CoinMarketCap Altcoin Season Index released a “Bitcoin Season” rating of 23 out of 100.
The index alternates between “Bitcoin Season” and “Altcoin Season” depending on the performance of the highest 100 altcoins relative to Bitcoin over the past 90 days.
According to CoinMarketCap, among the many top 100 cryptocurrencies within the last seven days, Sky (SKY) recorded the biggest decline with a decline of 9.73%, while Story (IP) recorded the biggest increase with an increase of 53.47%.
