Today's sentiment indicator is quite frightening.
Panic and greed index: 23
Returning to—an extremely panic zone.
If you only look at this number, it's easy to draw a conclusion:
'It's over, the market is going to crash.'
But let me first give you a conclusion upfront:
👉 This is a panic of 'emotions collapsing first, structure not collapsing'.
Moreover, this kind of panic has historically never been a bad thing.
1. First, let's clarify: what is this 23 actually panicking about?
The panic index is not a random thought; it consists of 6 elements:
Volatility (25%)
Trading volume (25%)
Social media heat (15%)
Market survey (15%)
BTC market share (10%)
Google search hot topics (10%)
When you break down these 6 items, you will discover an important fact:
👉 Most of these are 'emotional indicators', not 'fund indicators'.
In other words:
Volatility amplifies → Panic
Trading volume decreases → Panic
Social media pessimism → Panic
Searching for 'collapse' and 'bear market' is increasing → Panic
But there is one thing it hasn’t told you:
Is there a systemic withdrawal of money?
Two, there are no signals here that should cause real panic
The truly dangerous 'extreme panic' usually comes with three things:
1️⃣ Large-scale net outflow of stablecoins
2️⃣ Long-term holders on-chain are loosening
3️⃣ Forced deleveraging (chain liquidation)
And what about now?
Stablecoins are expanding, not contracting
Whales are swapping positions, not fleeing
There are liquidations, but they are not out of control
What does this indicate?
👉 Panic comes more from 'prices not rising + stock market falling + news being dense', rather than from fund panic.
Three, why does panic come so quickly? Because the market has been 'caught off guard'.
Recently, something very subtle has happened in the market:
Macro is becoming more accommodative (invisible QE)
But crypto stocks are falling
Emotions didn’t wait for a 'surge', but first waited for a 'pullback'
This has a very large psychological impact on retail investors.
Many people are thinking:
‘It’s all invisible QE, why isn’t it rising?’
Thus, emotions begin to rebound,
Expectations falling short → Emotional collapse → Panic index diving.
But the problem is:
👉 Easing is never an immediate market lift, but first changes the probability of 'not dying'.
Four, why do I say this is 'good position panic'
Looking back at history, every time the panic index drops to 20-25,
But when these situations occur simultaneously, the results are very similar:
No systemic financial risk
No stablecoin crisis
No regulatory sudden black swan
Just prices aren’t following + emotional imbalance
What does this kind of panic usually mean?
👉 'Those who don’t want to sell haven’t sold, and those who want to sell have already sold out.'
What’s left is hesitation, doubt, and wait-and-see.
Five, the most interesting thing is: Who is acting during panic?
When you look at today's and yesterday's news together, it feels very fragmented:
Panic index = 23
But whales are swapping with BNB
Stablecoins are buying real assets
Exchanges and ecosystems are subsidizing real usage
Institutions are discussing 'a more moderate policy environment'
This is not a coincidence.
👉 Emotional indicators are for retail investors; behavioral indicators are for funds.
Now the two are clearly diverging.
Six, what is the real risk of extreme panic?
I’m not saying feel-good statements, I’m being honest.
The only real risk of extreme panic is one:
👉 You sold 'things with structure intact' when your emotions were at their lowest.
And not:
Buying at the peak
Chasing after news
Scared away by the pullback
The market is best at doing one thing, which is:
Scaring people away when there is no systemic risk.
Seven, my judgment is very clear
👉 The panic index is 23, which is not a signal that the market has ended, but rather a signal that 'layering is complete'.
Impatient ones have already given up their chips
Emotional, already starting to doubt
And the real structural funds are slowly changing positions
If another round of volatility comes later,
The panic index may fluctuate repeatedly,
But the underlying logic is no longer 'will it die', but 'where will it rise from first'.
💬
Which state are you closer to now?
Already cleared positions, still holding on, or starting to slowly change structure?
Do you think this 'extreme panic' is
More like an opportunity, or a danger?
Let's discuss in the comments.
