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The Crypto Fear and Greed Index has fallen to its lowest point since March, raising new worries about investor confidence even as Bitcoin and Ethereum strive for a rebound.
Information provided by CryptoQuant analyst JA Maarturn on Sept. 29 indicated that sentiment dropped from a neutral 40 in August to an extreme fear level of 28. The index last reached this level in March, when Bitcoin was priced around $80,000.
Crypto Market Greed and Fear Index (Source: CryptoQuant)
At the same time, the significant decline in sentiment coincided with substantial sell-offs in major cryptocurrencies. Both Bitcoin and Ethereum fell below critical psychological thresholds of $110,000 and $4,000 last week, intensifying the atmosphere of uncertainty.
However, this decline was brief. As of the time of reporting, Bitcoin’s price has rebounded to $114,000, and Ethereum is trading above $4,100, indicating that panic selling has transitioned to a more stable market.
Market bottom?
Asset management firm Bitwise suggested that the fear-driven environment might signify a bottoming phase.
It noted:
“Last week, sentiment reached ‘extreme fear’ levels on two occasions during the day, yet Bitcoin has demonstrated relative strength, maintaining around ~$108k – a level that corresponds with the short-term holder cost basis – this seems to provide robust support for Bitcoin at present as sellers are becoming increasingly fatigued.”
The firm also highlighted that Bitcoin remains nearly 3.7% higher in September despite the previous week’s volatility. This is significant given that September is typically the weakest month of the year for the leading cryptocurrency.
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Conversely, the final quarter often yields substantial gains, with November consistently being Bitcoin’s most lucrative month.
According to Bitwise, this historical trend suggests that the current weakness may represent an opportunity rather than a warning signal.
Data from Glassnode reinforces this argument, revealing that short-term holders are now realizing net losses, a situation that has historically indicated reset points prior to renewed accumulation. Periods of capitulation, where recent buyers sell at a loss, have frequently laid the groundwork for longer-term price increases.
Bitcoin Short-term Holders Net Profit and Loss (Source: Glassnode)
Bitcoin prepares for Uptober
In light of the flagship digital asset’s price resilience, crypto trading firm QCP suggested that BTC traders are hopeful for an “Uptober” rally.
The firm noted that gradual optimism has returned to the perpetual futures market, where leveraged long positions have re-emerged following last week’s liquidations.
QCP reported that Bitcoin open interest has increased from $42.8 billion to $43.6 billion. Concurrently, funding rates remain positive, and positioning on platforms like Hyperliquid has shifted decisively back toward the long side.
Nevertheless, the firm cautioned that a sustained upward trend will only be validated if BTC surpasses the $115,000 mark. It added:
“Options markets reflect this uncertainty, with put skew and open interest in BTC and ETH gradually normalizing as traders rebuild their confidence.”
The post Is ‘Uptober’ back? Market fear craters as Bitcoin reclaims $114k appeared first on CryptoSlate.
