The cryptocurrency market is currently witnessing a significant downturn in Bitcoin's sentiment, with the "Bitcoin Fear & Greed" index plummeting to a score of just 10. This marks the lowest level recorded since February, signaling extreme fear among investors. According to analysis from 10x Research, Bitcoin's price has fallen below both its 7-day and 30-day moving averages, which is indicative of weak momentum in both the short and medium terms. Over the past week, the leading cryptocurrency has experienced a 6.7% loss, with its price dropping below the $100,000 threshold.

Several factors are contributing to this decline. Large holders, often referred to as "whales," have been actively selling off their positions. Additionally, U.S. spot Bitcoin ETFs have seen significant outflows, suggesting a waning interest from institutional investors. Bitcoin's persistent negative correlation with the Nasdaq 100 further exacerbates its volatility; it tends to fall more sharply during technology stock sell-offs than it rises during tech rallies. When Bitcoin's price dipped below $95,000 on Friday, discussions surrounding the cryptocurrency surged to a four-month high, as reported by analytics platform Santiment. This spike in discussion volume is often a sign of widespread fear, uncertainty, and doubt (FUD) among retail investors. Historically, such extreme panic can indicate that selling pressure is peaking and a potential market reversal might be imminent, as extreme panic frequently coincides with market lows.

In a related technical development, Bitcoin has recently formed a new "death cross." While the term itself sounds alarming, it is generally considered a lagging indicator in technical analysis. Analyst Benjamin Cowen observes that these events have frequently coincided with local market lows, potentially signaling short-term bottoms. However, Cowen also offers a cautionary perspective: if the current market cycle is nearing its end, any bounce following this death cross might ultimately fail. He emphasizes that if Bitcoin is to rebound within its current cycle, signs of a bounce should emerge within the next week. Should no such rebound materialize, it would likely indicate further downside before a more substantial rally potentially targets the 200-day moving average, which would then form a macro lower high, a critical juncture in the market cycle.