Crypto Market Slips Into Extreme Fear as Bitcoin Price Consolidation Begins

The crypto market has entered extreme fear as Bitcoin (BTC) USD trades at $96,297.25. Analysts note a 5.29% decline over the past week and an 11.37% drop in one month.

Notably, investors are cautious as volatility rises, risk appetite drops, and sentiment in memecoins weakens.

BTC USD Fear and Crypto Market Caution

It is worth mentioning that the largest digital asset Bitcoin falls, fueling a drop in the Fear and Greed Index. This index has hit 10, signaling extreme fear among traders.

The current price of $96,297.25 shows a decline of 0.61% in the last 24 hours and 11.37% in the past month. Over the year, Bitcoin has still gained 9.24%, indicating a mixed performance.

Furthermore, crypto market data shows that Bitcoins Relative Strength Index (RSI) is pegged at 31.33, nearing oversold conditions.

This could attract investors who prefer to take positions when prices are lower. Traders note that overall risk appetite has dropped significantly.

In a separate development, Ted Pillows, a crypto analyst, commented that risk appetite dropped a lot lately, reflecting a cautious mood in the market.

In his post, the decline in memecoins has been particularly notable. Ted Pillow also observed that beyond BTC USD, memecoins have been the worst-performing sector in the fourth quarter.

Comparisons with last year show how quickly sentiment can change, as some sectors that were strong previously now face losses.

Extreme Fear May Present Opportunities

A recent post on social media provided a fresh perspective that extreme fear in the market does not always mean a crash is imminent.

In his post, Shanaka Anslem Perera, a market commentator, pointed out that markets tend to fall when investors are too confident, not when they are fearful.

He noted that historically, major market bottoms often occur when fear is high.

Examples include the 2008 financial crisis, the 2011 debt ceiling, and March 2020 market lows.

The current situation shows that investors are defensive and cautious. Many are selling optionality, while others wait for clarity.

Shanaka explained that extreme fear at high market levels is not necessarily a sign of a top.

He said, “It is a regime-test: either the world is truly breaking, or this is a rare moment when the market pays you to think instead of feel.”

Furthermore, the recent conversation on social media reflects this cautious mood.

He commented that the cooldown in the market might clear out noise and allow stronger momentum to develop later.

Crypto market analyst Milad noted that fewer people want to take risks now, and Ted added that this shift is evident in investor behavior.

Bitcoin Price Consolidation Shows Volatility

Bitcoins daily trading range fluctuated between $97,989 and $104,005, showing a period of consolidation and high volatility.

Analysts suggest that the market is adjusting after recent movements, and short-term trends may continue to be unpredictable.

Meanwhile, the memecoin sector shows how sentiment drives market changes.

Traders are convinced that losses have been faster than gains, highlighting the rapid shifts in investor confidence.

Ted and others observe that the cycle has flipped compared to last year, and patience may be rewarded if the market stabilizes.

Despite the caution, some investors see potential in current levels. Consolidation phases often allow markets to stabilize and prepare for the next move.

Analysts suggest watching technical indicators, like the RSI, and following shifts in risk appetite to guide decisions.

BTC USDs extreme fear readings and recent consolidation show that the market is in a cautious phase.

Investors are reducing risk exposure, waiting for clearer signals, and observing volatility.

While uncertainty remains, careful monitoring may offer opportunities for those willing to act prudently.