Crypto market sentiment is stuck in extreme fear as good news fails to boost prices.

Crypto market sentiment has been deeply in the red for the past two months. The Greed and Fear Index has spent more than 30% of 2025 in the “fear” or “extreme fear” zone, while alternative measures have consistently fluctuated around 10–25 points since mid-November. Bitcoin is heading for its worst fourth quarter since 2018, and many large-cap altcoins have lost up to 90% of their value from their peaks. In stark contrast, gold, silver, and major stock indices have all reached new highs during the same period.

It's noteworthy that crypto isn't short of "good news." Spot ETFs are launching and attracting capital, the regulatory environment is becoming clearer, monetary policy is shifting towards easing, and stories of institutional participation are becoming increasingly frequent. However, every rebound is quickly followed by selling pressure, turning positive milestones into "news-driven" sell-offs. The gap between expectations and actual performance is widening, creating a unique form of psychological poison: investors feel the argument is correct, but the price doesn't.

The dwindling liquidity is further exacerbating the fear. Trading volume, active addresses, and open interest are all declining, indicating a pullback in retail capital. With thin buying power, leverage liquidations and long-term selling easily amplify the decline.

This extreme fear reflects a weary and distrustful market, where good news is ineffective and bad news only accelerates price drops. The big question for 2026 is whether crypto will find a new, powerful catalyst, or whether this cycle will end with a prolonged and quiet capitulation.