Data from crypto analytics platform Santiment shows that positive discussions across X, Reddit, and Telegram surged after a decline at the start of the week.

This shift is not driven by price action alone—geopolitical developments have played a role as well.

US President Donald Trump stated on Monday that the war with Iran is “almost complete,” temporarily shifting global risk sentiment and contributing to a pullback in oil prices. However, he also warned on Truth Social that if Iran disrupted oil supply, the US would increase military pressure.

Markets often respond more to expectations than to certainty. According to Santiment:

“During periods of uncertainty, investors seek alternative assets. Crypto markets, operating 24/7 globally, often react quickly to such developments.”

Bitcoin Resilience Under Scrutiny

Ryan McMillin, Chief Investment Officer at Australian crypto investment firm Merkle Tree Capital, notes that Bitcoin’s recent strength amid geopolitical risks has bolstered investor confidence.

McMillin highlights several simultaneous positive factors:

• Bitcoin’s resilience to geopolitical shocks

• Continued corporate purchases

• Easing inflation pressures

• Progress toward crypto regulation in the US

He also points out that short positions may be vulnerable:

McMillin believes that particularly for short positions, the market is entering a risky period. A potential short squeeze could push Bitcoin toward the $80,000 range.

Reclaiming $70K Triggers FOMO

According to crypto exchange BTC Markets analyst Rachael Lucas, $70,000 is not just a technical level but also a psychological threshold. Its recovery across social media and trading alerts fuels the fear of missing out.

Lucas emphasizes that multiple factors converging—expectations of easing Iran tensions, sharp oil pullbacks, and progress on stablecoin regulation—have softened macro headwinds and accelerated social sentiment shifts.

Mixed Signals Remain

Despite the optimism on social media, some metrics remain cautious.

The Crypto Fear & Greed Index currently sits at 15, signaling “extreme fear.” Google Trends also shows that Bitcoin-related searches have cooled from their March 5 peak of 100 to around 71.

In other words, attention is growing, but it has not yet reached a peak.

FOMO Cycle in Motion?

FOMO often becomes a self-reinforcing cycle in crypto. Price gains attract social media chatter, new buyers enter, and trading volume rises, fueling further upward movement.

McMillin notes that after five months of declines, Bitcoin had become heavily oversold. The extended correction since the October all-time high of $126,000 set the stage for at least a short-term relief rally.

Lucas adds that on-chain data now shows a healthier picture compared to previous FOMO cycles. Funding rates have reset constructively, and ETF flows are steady, meaning the market is not solely driven by high-leverage retail trades.

Risks Persist

Still, the market is far from risk-free. Geopolitical tensions in the Middle East remain unresolved, and any rebound in oil prices could quickly shift crypto sentiment from FOMO back to FUD.

Bitcoin is currently holding above $70,000, with the market waiting for the next major catalyst.

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The brief recovery seen earlier in the week quickly faded, highlighting how fragile market confidence remains.

According to data from CoinMarketCap, the index had been sitting at 20 on Friday, a level classified as “fear.” While still negative, it represented a slightly more stable sentiment compared to the deeper panic levels seen earlier in the year.

However, that stabilization proved short-lived.

The index briefly climbed to 25 on Wednesday, suggesting a modest improvement in sentiment. But as geopolitical tensions involving the United States, Israel and Iran intensified again, risk appetite among investors weakened and the indicator slipped back into extreme fear territory.

Market Confidence Still Shaken by Macro Risks

Investor sentiment in the crypto market has been fragile for months, largely due to a combination of macroeconomic uncertainty and geopolitical developments.

Earlier in February, the index plunged to 5, marking its lowest level of the year. That drop came amid a broader downturn in digital assets and a series of headwinds affecting global financial markets.

Several macro factors contributed to the deterioration in sentiment:

Uncertainty surrounding global interest rate policies, tightening liquidity conditions, rising US government debt levels and escalating geopolitical tensions all played a role in weakening investor confidence.

These pressures continue to shape risk appetite across financial markets, including cryptocurrencies.

The October 2025 Crash Still Haunts the Market

The turning point for market sentiment traces back to the major crypto crash in October 2025.

During that sell-off, the price of Bitcoin dropped by more than 50% from its all-time high before staging a limited recovery. The crash wiped out hundreds of billions of dollars in value from the broader altcoin market and triggered a prolonged downturn across digital assets.

While Bitcoin has managed to stabilize somewhat since then, the broader market has struggled to regain momentum.

Altcoins, in particular, remain under heavy pressure.

According to CryptoQuant analyst Darkfost, about 38% of altcoins are currently trading near their all-time low prices, a situation he described as even more severe than the conditions seen after the FTX collapse.

Liquidity Drain Hits Altcoins the Hardest

The sharp price decline across the crypto market has also been accompanied by a major drop in trading activity.

Overall crypto trading volumes have fallen by roughly 50%, signaling weaker liquidity and reduced participation from investors.

This environment tends to affect altcoins more severely. In the typical liquidity cycle of the crypto market, capital flows first into Bitcoin, then into large-cap altcoins, and finally into smaller speculative tokens. When risk appetite fades, that flow reverses quickly.

Darkfost noted that this dynamic explains why the altcoin sector is suffering the most.

“Altcoins remain the last sector of the crypto market where liquidity typically flows,” he said, adding that the ongoing geopolitical tensions and macroeconomic deterioration over the past several months make the current situation unsurprising.

Social Sentiment Toward Altcoins Hits Two-Year Low

Market psychology is also visible in social media and search data.

According to crypto analytics platform Santiment, mentions of “altcoins” across social media platforms have dropped to their lowest level in two years. This decline suggests that retail interest in speculative crypto assets has significantly cooled.

Search trends reveal a similar pattern.

Data from Google Trends shows that worldwide searches for the phrase “Bitcoin going to zero” reached their highest level since 2022 in February 2026.

Historically, spikes in such pessimistic search queries often appear during periods of extremely weak investor confidence.

For now, the broader picture remains clear: liquidity is thin, risk appetite is fading and investor sentiment in the crypto market continues to hover deep inside the fear zone.

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Retail Fear Signals a Contrarian Move

On January 20, Santiment reported that XRP’s positive-to-negative sentiment ratio fell below 1.873, and it has continued sliding to around 1.794. This reflects growing pessimism among retail investors, who remain wary of the token’s short-term prospects. However, analysts view this extreme fear as a contrarian signal, noting that past patterns often show prices rebounding when sentiment hits these lows.

“Historically, high levels of bearish commentary tend to trigger rallies. Prices often move opposite to retail expectations,” Santiment noted.

The current decline comes as XRP struggles to stay above the $2 psychological level, intensifying bearish sentiment. Yet, this setup could present an opportunity for traders looking to buy the dip.

ETF Outflows Increase Short-Term Pressure

The decline coincides with $53 million net outflow from U.S. spot XRP ETFs on January 21. While this adds pressure, past data shows that ETF-driven outflows don’t always trigger extended drops and can sometimes create accumulation points.

Historical Patterns Suggest Possible Upside

Historically, when sentiment dips below 1.873, XRP has bounced. In early January 2026, XRP recovered from a Q4 2025 drop of 30%, surging 29% to $2.41. A similar pattern repeated later in January, showing that extreme fear often aligns with short-term price surges.

Why This Level Matters

XRP currently trades at $1.94, marking a slight recovery from its weekly low of $1.80, though it remains 7.5% down for the week. Market sentiment remains heavily fear-driven, but historical data indicates that such extreme pessimism often precedes short-term rallies. ETF flows and broader market conditions may delay this reaction, yet the setup remains noteworthy for active traders.

Analysts suggest monitoring key levels and sentiment changes closely, as a renewed shift in retail mood could trigger another bounce.

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According to data from Santiment, wallets holding between 10 and 10,000 BTC — commonly described as “smart money” — accumulated a total of 36,322 BTC between January 10 and January 19. At current market prices, this accumulation is valued at approximately $3.2 billion.

Notably, this buying activity occurred while Bitcoin was trending lower, highlighting a growing disconnect between price movement and on-chain behavior.

Buying Continues Despite the Pullback

Bitcoin fell by 4.55% over the past 24 hours, briefly dipping to around $89,110. Despite the decline, Santiment reported that whale and “shark” wallets continued to add to their holdings.

This pattern suggests that large players are prioritizing longer-term position building rather than reacting to short-term volatility. Historically, periods of heightened uncertainty have often coincided with similar accumulation phases in on-chain data.

Retail Investors Move the Other Way

The most striking aspect of the current setup is the sharp directional split between large holders and retail participants. Wallets holding less than 0.01 BTC sold a combined 132 BTC during the same period. While the dollar value of roughly $11.66 million appears modest, the directional signal is hard to ignore.

As Bitcoin retreated toward the $89,400 level, traditional safe havens like gold and silver continued to test new highs. Even so, on-chain metrics indicate that large Bitcoin holders have not shifted into distribution mode.

Santiment data shows that wallets holding between 10 and 10,000 BTC increased their balances by 0.27% over the last nine days, while sub-0.01 BTC retail wallets reduced exposure by 0.28%. Excluding geopolitical noise, the platform associates this pattern with longer-term bullish divergences in crypto market structure.

Santiment also notes that the simultaneous presence of smart money accumulation and retail selling tends to increase the probability of upside divergence. However, the timing of such moves remains notoriously difficult to predict.

Tariff Rhetoric Weighs on Price

As for why Bitcoin has struggled to regain momentum, macroeconomic and political factors appear to be playing a decisive role. Comments from Donald Trump regarding potential tariffs on Europe, alongside renewed rhetoric tied to Greenland, added pressure to risk assets.

Following these remarks, Bitcoin briefly dropped by nearly 7%. Yet large wallets remaining active on the buy side has made the gap between price action and on-chain behavior increasingly visible.

The Market Remains Cautious

The Crypto Fear & Greed Index currently sits at 32, reflecting elevated levels of investor anxiety. A similar picture emerges from the Altcoin Season Index, which stands at 29 out of 100. Capital rotation into altcoins remains limited, suggesting the market is still heavily Bitcoin-centric.

Analysts Remain Divided

CryptoQuant CEO Ki Young Ju has pointed out that retail investors appear to have largely stepped away, leaving accumulation activity dominated by whales.

Meanwhile, analyst Will Clemente argues that current price action has failed to generate meaningful excitement around Bitcoin. The ongoing divergence between on-chain signals and market behavior suggests that the broader directional bias has yet to fully resolve.

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Market analysts note that these sudden surges often follow a structural pattern that moves against retail investor behavior. Short bursts of aggressive buying, followed by immediate stalling, suggest that the move may rely more on thin liquidity than on a sustainable trend. The sharp retreat from the peak has intensified uncertainty among traders who are still looking for clear direction.

Fragile Foundations Behind the Rebound

Bitcoin’s jump to the 94,000-dollar level instantly shifted social sentiment. Analysts say this atmosphere makes traders vulnerable to quick FOMO reactions. Yet the price retraced back to the 92,000-dollar area within minutes, revealing how fragile the rebound actually was.

“Markets move opposite to the small traders’ behavior,” Santiment said, adding that this dynamic became clear in the hours following the monthly high.

Experts explain that such short-lived spikes often appear in periods of weak market depth. Limited order book density allows small liquidity injections to move prices sharply. Once these artificial pushes fade, the trend loses momentum and reverses quickly.

Fed Uncertainty Tightens Market Conditions

The market’s attention is now centered on Wednesday’s Federal Reserve announcement. Futures markets signal an almost 88 percent probability of a 25-basis-point rate cut. However, several analysts warn that a vague or cautious outlook on the broader rate path could pressure Bitcoin in the short term.

The market is split between two scenarios. Some investors believe an easing cycle will boost risk appetite. Others argue the price has already overreacted to optimistic expectations and could face a correction.

Key near-term risks include:

• A more cautious Fed stance could trigger immediate selling pressure.

Manipulation Concerns Inject More Doubt

Some long-term BTC investors say the sudden price move lacked organic characteristics. The abrupt wave of heavy market buys, followed by complete stagnation, has fueled concerns about engineered price action. Large trades executed in a thin order book can push prices upward quickly, only to lose strength moments later. For some observers, this resembles a classic FOMO setup designed to unload positions at better levels.

All signs point to the Fed announcement as the key catalyst that will shape Bitcoin next major move. The market appears ready for intense volatility, and investor sentiment remains highly reactive during this uncertain phase.

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Ethereum price outlook strengthens

According to Santiment, stablecoin yields currently average between 3.9% and 4.5%. These relatively low returns suggest that risk appetite has not reached extreme levels across the crypto market. Historically, a sharp rise in stablecoin yields indicates a surge in speculative leverage, often appearing just before major market tops.

Santiment notes that today’s subdued yield environment leaves room for ETH to climb higher. Ether could gain roughly 6.7% from recent levels and retest the key $3,200 resistance zone. This scenario aligns with the recent decline in volatility and the easing of selling pressure seen across major exchanges. The combination of reduced leverage and improving liquidity supports a potential short-term recovery.

Technical indicators point to early ETH recovery

Ether fell 21.32% over the past 30 days, reflecting the broader market correction triggered after the sharp $19 billion liquidation event in early October. Despite the pullback, technical momentum is beginning to turn positive. Analyst Matthew Hyland highlighted that the ETH-BTC weekly chart is approaching a “bullish ribbon flip” for the first time since 2020, a pattern that historically signals relative strength for Ethereum.

Spot Ether ETFs also reversed their outflow trend this week. After three weeks of heavy withdrawals, ETFs recorded $312.6 million in net inflows. Growing institutional exposure is strengthening medium-term sentiment and adds weight to the bullish Ether price outlook. Combined with declining derivatives imbalance, these factors position ETH for a more sustained recovery attempt.

Market sentiment is slowly stabilizing

The broader crypto market is showing the first signs of sentiment recovery. The Crypto Fear & Greed Index spent 18 days in extreme fear during November before climbing back into the fear zone. This shift suggests that investor mood is stabilizing after weeks of pressure. Meanwhile, historical data from CoinGlass shows that December has delivered an average 6.85% return for ETH since 2013.

However, Bitcoin’s underperformance in typically strong months such as October and November raises questions about the reliability of seasonality this year. Even so, easing macro pressure, improving flows and low speculative leverage continue to support an upward Ether price outlook.

Key factors strengthening the short-term bullish view include:

• Low stablecoin yields supporting a healthier Ether price outlook
• Renewed ETF inflows signaling stronger institutional confidence
• A potential ETH-BTC bullish technical shift on the weekly chart

Together, these indicators point to a rising likelihood that ETH could revisit the $3,200 mark in the near term.

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Bitcoin Falls Below $106K, Market Sentiment Collapses

Bitcoin slipped from a daily high above $109,000 on Monday to a 24-hour low of $105,540. According to CoinGecko, BTC is now hovering just above $106,500 after briefly touching $104,497. This Bitcoin price drop has intensified fear among investors and raised concerns about further declines in the crypto market.

The Crypto Fear and Greed Index fell by nearly 50% in one day, signaling “Extreme Fear.” Analysts link the current downturn to weaker institutional demand, slowing blockchain activity and growing uncertainty over the U.S. Federal Reserve’s policy stance.

Why Investors Are in ‘Extreme Fear’

Several factors contributed to the negative sentiment:

• Over $800 million in net outflows from Bitcoin-linked ETFs last week

• Institutional buying fell below daily mining supply for the first time in seven months

• Fed cut interest rates for the second time this year but signaled no clear plan for future cuts

• Risk appetite declined amid global economic concerns and market stress

As a result, some investors rushed to exit positions, while others view this dip as a potential accumulation zone.

What Is ‘Moonvember’ and Is It Still Possible?

“Moonvember” is a term used in the crypto community to describe Bitcoin’s historical trend of strong gains in November — often exceeding 40% on average. Investors expect BTC to “go to the moon” during this month. However, with market sentiment in extreme fear and confidence fading, optimism around Moonvember is now more cautious and uncertain.

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Bitcoin ETF Flows and Cautious Movement in On-Chain Data 

Despite the rapid rise in Bitcoin prices, on-chain data does not indicate excessive euphoria. This suggests that the market is not experiencing “irrational exuberance,” and investors are acting cautiously. Therefore, the price increase is based on solid foundations. 

Furthermore, the ARK Invest report relies on Glassnode data. Bitcoin’s unrealized profits in this cycle are slightly above average. Historically, irrational exuberance has seen levels go over three standard deviations. However, such extreme excitement is not evident at present. In May, Bitcoin ETF inflows remained strong compared to gold ETFs, which fell from $9.2 billion to $1.5 billion. The value of Bitcoin-traded products increased by over 120%. On June 10, 2025, net inflows into spot Bitcoin ETFs reached $422 million, while spot Ethereum ETFs saw $125 million in inflows. 

Weakening US Economy Boosts Interest in Bitcoin 

In the U.S., rising costs and declining demand in the housing, automotive, and services sectors are causing economic slowdown. In this environment, Bitcoin is emerging as an alternative store of value. Known as digital gold, Bitcoin is strengthening its reputation as a safe haven during uncertain economic times. 

Bitcoin Core Development Activity at a 10-Year Low 

According to the report, Bitcoin Core development activity has dropped to its lowest level in the past decade. This decline indicates that Bitcoin has shifted from being a technology-driven innovative project to a stable and reliable monetary asset. Bitcoin is now more prominent as a store of value and a medium of exchange rather than a tech development platform. 

The record level Bitcoin reached in May 2025 was critically influenced by investor interest in spot Bitcoin ETFs. The 121% increase in ETF inflows demonstrates the growing strength of digital assets compared to traditional investment tools. On the other hand, the outflows from gold ETFs—previously seen as a safe haven—signal a change in investor risk perception. 

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• When investors are positive and optimistic we call it a bullish sentiment and prices tend to rise.
• On the other hand, when investors are negative and fearful, it’s called a bearish sentiment and prices tend to drop.

To make better decisions, investors combine market sentiment with other analysis methods.

So, What Can We Look Out For?

Crypto Hype: Sometimes, a particular cryptocurrency gets a lot of attention and excitement. Influencers of major crypto projects can create this hype. You can gauge the hype by looking at searches on trends. If a cryptocurrency is getting a lot of searches, it indicates high investor interest.

Crypto-Related News: Stay updated with the latest news from trusted crypto news platforms. Major events like a country banning crypto or a big exchange failing can have a negative impact on the market sentiment. On the other hand, news about more countries accepting cryptocurrency or big investors investing heavily can create a positive sentiment.

Social Media Pages: Check out social media pages and communities related to a cryptocurrency project. Platforms like Telegram, Discord, Twitter and Reddit can provide valuable insights into what people think about a project.

There are also sentiment indicators that can help you gauge market sentiment. Investors focus on famous Bitcoin Indicators to predict future crypto trend.

Bitcoin Fear and Greed Index: This indicator measures the fear and greed levels in the Bitcoin market on a scale of 0 to 100. It has been effecting by market volatility, trading volume, social media trends and dominance. 0 suggests extreme fear, 100 indicates extreme greed.

Bull and Bear Index: This indicator analyzes social media conversations to determine how bullish or bearish people are feeling. A reading of 0 indicates strong bearish sentiment, while a reading of 1 suggests strong bullish sentiment.

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