Bitcoin (BTC) fell by about 22% last week. The price reached around $60,013 but has recovered to $71,240 today, February 6, 2026. This extreme volatility, characterized by a sharp drop last time, caused extreme panic among investors.
Bitcoin is currently trading 47% below its all-time high of $126,000, set in October 2025. This significant correction in digital and cryptocurrencies is impacting the fear and greed index (index of fear and greedin English).
This index fluctuates on a scale of 0 to 100, but as you can see in the graph, it currently registers a value of 9, which falls under “extreme fear.” This is the lowest level observed last year and represents a level of pessimism not seen since 2022. This was at a time when the market was struggling with the collapse of Terra (LUNA/UST), the bankruptcies of financial institutions such as Celsius and Voyager, the subsequent bankruptcy of the FTX exchange, and aggressive pressure from the Federal Reserve to raise interest rates.
The indicator developed by the Alternative.me site is Estimate the general sentiment of the market by analyzing various factors. The composition of the index includes the following factors and their respective weights: Bitcoin Volatility (25%), Market Momentum and Volume (25%), Research (15%), Social Media Posts (15%), Bitcoin Dominance (10%), and Google Trends Search Trends (10%).
Each of these factors has a specific weight in the final calculation, with the aim of quantifying the prevailing sentiment in the market and estimating whether investors are acting primarily driven by emotions such as fear or greed.
In theory, as the index provider itself explains on its website, extreme levels of fear reflect investors worrying too much and engaging in (often irrational) panic selling, but for others, this could be an attractive buying opportunity for those who are confident in Bitcoin’s long-term potential.
But in reality, this state of fear can be: lasts several weeks or months Prices won’t reverse anytime soon. Therefore, very low indicators do not guarantee future upside, and there is nothing to prevent Bitcoin from continuing its downward correction in the short term while uncertainty and lack of confidence continue to dominate market behavior.
Voice of the market: Panic and long-term perspective
The panic is clearly reflected in the forecasts of several technical analysts. Nick Pucklin of Coin Bureau Indicates Bitcoin could head towards $55,700. Similarly, technical strategist Katie Stockton recently predicted a decisive break below $70,000, which is what happened, in which case the price could fall to $57,800 before finding significant support.
on the other hand, There are voices calling for calm. and emphasizes the strong foundations of the ecosystem. Rodrigo Duran, communications director at NotBank by Cryptomarket exchange, commented that there is no reason for investors to panic. According to Duran, such corrections are a natural part of the market maturation process, as long as the structural fundamentals such as institutional adoption, regulatory development, and crypto infrastructure expansion are solid.
Matt Hogan, chief investment officer at Bitwise, asserts that crypto winter will start in January 2025. In his view, Winter is likely closer to the end of this bearish cycle than the beginning, which suggests the market may be moving closer to stabilizing after clearing the excesses.
Although the current sentiment is panic-like, Bitcoin has overcome severe corrections in the past thanks to growing adoption and underlying fundamentals. In general, significant doubts remain about the direction of prices in the near future, leaving the possibility of stabilization, rebound (what is happening now), or further correction.
