After consecutive bloodbaths, the crypto circle is panicking. After the last time of "such panic," Bitcoin fell another 25%.

The cryptocurrency market sentiment index has dropped to the lowest point this year, sparking investor concerns about a new round of deep corrections. Despite the spread of panic, many analysts believe that the current extreme pessimism may signal the formation of a local bottom and advise investors to remain patient rather than panic sell.

On November 13, the Crypto Fear & Greed Index plunged to 15, marking the lowest level since February this year. This extreme panic reading has alerted the market: the last time the index fell below 20 was on February 27, and in the following month, Bitcoin's price dropped 25% to $75,000.

According to the latest report from market sentiment analysis platform Santiment, negative discussion about the three major cryptocurrencies—Bitcoin, Ethereum, and XRP—has surged sharply, with sentiment levels far below the normal range. However, the firm sees this extreme pessimism as a potential bullish signal, suggesting the market is approaching a capitulation stage.

Industry experts urge investors to adopt the strategy of "buying during panic and selling during greed." Although this strategy has proven effective over time, most retail investors still suffer losses due to excessive leverage or a lack of patience.

Fear Index Hits New Low for the Year

The Fear & Greed Index is calculated based on various factors, including price volatility, trading volume, social media trends, and Bitcoin market dominance, to represent overall market sentiment. A reading of 15 indicates an "extreme fear" state, reflecting widespread pessimism across the crypto community.

This is the first time since February that the index has dropped so low. Historical data show that after the index fell below 20 on February 27, Bitcoin experienced a 25% drop in the following month. This precedent has market participants worried that a similar correction may occur again.

Since the large-scale liquidation event on October 11, market sentiment has not recovered but instead deteriorated further. Key sentiment indicators show that investor confidence remains persistently low.

Negative Sentiment Dominates Market Narrative

Santiment has analyzed the community discussions of Bitcoin, Ethereum, and XRP through positive/negative sentiment ratios. When this ratio drops sharply, it means that negative discussion dominates the market narrative. Currently, sentiment levels for these three assets are much lower than normal.

However, Santiment interprets this extreme negativity as a potential bullish signal. The firm notes in its report:

When the public turns negative on assets, especially leading assets in the cryptocurrency market, it signals we are approaching a capitulation point. Once retail investors sell off, major holders will acquire the dumped tokens and push prices higher. It's not a question of "if" it will happen, but "when" it will happen.

Analysts Advise Patience

Several well-known market analysts agree with this view, stating that panic selling is not the right response. Analyst Joe Consorti said that Bitcoin market sentiment is as poor as it was during the February to April correction period. With weak holders being flushed out, a local bottom is forming. Patience is a virtue.

Kyle Reidhead of Milk Road takes a more cautious stance, believing that this negative sentiment could push Bitcoin down to the $90,000 range before a strong rebound occurs.

Historical data show that the strategy of "buying in panic, selling during greed" has worked well for Bitcoin investors over the years. However, most retail investors still suffer losses, either due to over-leveraging or a lack of patience to withstand prolonged periods of extreme fear.

Risk Warning and DisclaimerThe market carries risks; investments should be made cautiously. This article does not constitute personalized investment advice and does not take into account the special investment objectives, financial situation, or needs of individual users. Users should assess whether any opinions, views, or conclusions in this article fit their specific circumstances. Investments based on this are made at your own risk.