Panic and greed index rebounds from the bottom to neutral, signaling a turning point in the crypto market sentiment

Cryptocurrency Fear and Greed Index rose to 40 on Sunday, shifting to a “Neutral” state for the first time since October 2025. From extreme fear (10 points in November) to now neutral, the market sentiment has experienced a significant rebound. This shift reflects a transition in investor mentality from extreme pessimism to relative rationality.

The Complete Trajectory of Sentiment Reversal

From Collapse to Panic

The market crash in October 2025 marked a turning point. BTC fell from a historical high of $125,000 to $80,000, a 35% drop in a single month. The altcoin market was even more severe, with market cap plunging 33% in one day. Such extreme volatility directly shattered investors’ psychological defenses.

In the following November, the Fear and Greed Index hit a low of 10, indicating extreme fear. This number itself tells a story: market participants were almost collectively in despair.

Slow Recovery of Sentiment

From November’s 10 points to the current 40 points, it took about two months for the market to complete the sentiment recovery. The process was not steep, indicating that the rebound was more based on gradual confidence restoration rather than an overreaction of emotions.

Currently, BTC is priced at $92,979, up 2.10% in 24 hours and 3.73% over 7 days. Although it has not yet returned to the $125,000 high, it has clearly rebounded from the $80,000 low. Market cap share remains stable at 58.66%, showing BTC’s continued strong position in the market.

Neutral Does Not Equal Optimism

It’s important to clarify a common misconception: shifting to “Neutral” on the index does not mean the market is safe or the best entry point.

The midpoint of the Fear and Greed Index is 50. Values from 0-25 indicate extreme fear, 25-50 fear, 50-75 greed, and 75-100 extreme greed. The current 40 still leans toward the upper end of the “fear” zone, far from true “greed.”

This position more reflects that investors have emerged from despair but have not yet regained optimism. In other words, market sentiment is undergoing a “normalization” process.

Concerns for 2026

Although sentiment is rebounding, the news clearly highlights two potential resistance factors:

• Geopolitical Tensions: Global political uncertainties still exist, which could at any time impact risk assets.
• Lack of Retail Interest: While sentiment has improved, retail participation remains lukewarm, indicating the market still lacks genuine “popularity.”

According to related reports, Matrixport has issued a warning: 2026 will be a high-risk year for digital assets. This aligns with the risk factors mentioned in the news.

Summary

The shift of the crypto Fear and Greed Index to neutral is a noteworthy signal, indicating the market has recovered from extreme fear to a more rational state. However, this change is more about “fear receding” than “confidence exploding.” Investors should understand that a neutral level means the market is searching for a new direction, not that it has found the answer.

The 2026 crypto market may face more uncertainties. Geopolitical risks, retail participation, policy changes, and other factors could all become variables. In such an environment, the sentiment rebound is just the beginning; the real test still lies ahead.