Fear Dominates Investor Sentiment… Is Bitcoin’s Recovery Slipping Away?

▲ Bitcoin (BTC), virtual assets, cryptocurrency, market fear, crypto decline / ChatGPT-generated image

Extreme fear in the virtual asset market remains at heightened levels, acting as a decisive obstacle to Bitcoin’s price recovery.

According to a report by cryptocurrency-focused outlet NewsBTC on Feb. 21 (local time), Bitcoin’s investor sentiment index recorded 22, indicating that the market remains in a state of extreme fear. This suggests that investors continue to maintain strong caution over the possibility of further declines. Even as price volatility narrows, the psychological contraction among market participants shows little sign of easing.

The prolonged stagnation of the sentiment index, combined with a lack of market liquidity, is weakening Bitcoin’s support levels. Analysts warn that the longer the extreme fear phase persists, the more delayed bargain-buying inflows may become, potentially intensifying downward pressure. In particular, reduced trading volume across the market—driven by diminished confidence among retail investors—is cited as a major factor hindering a rebound.

Institutional investors are also maintaining a cautious stance, watching the market from the sidelines. Continued outflows from spot Bitcoin ETFs, along with the absence of strong positive catalysts capable of determining market direction, are weighing on sentiment recovery. Experts anticipate that such psychological pressure will persist until broader macroeconomic uncertainties are resolved.

From a technical perspective, attempts to defend key support levels are ongoing, but buying momentum remains weak. On higher time frames, Bitcoin appears to be undergoing a bottoming process to break out of its downtrend, yet extreme fear is causing hesitation among buyers. Analysts suggest that a meaningful rebound in sentiment indicators must precede any stable market recovery.

Investors are cautiously observing the current market conditions while searching for the next inflection point. Although some contrarian views argue that extreme fear may signal a buying opportunity, most participants appear to be waiting for clear signs of a trend reversal. All eyes are now on whether Bitcoin can overcome psychological resistance and firmly establish a support base.

Disclaimer: This article is for investment reference only and the publisher is not responsible for any losses incurred based on it. The content should be interpreted for informational purposes only.