The sentiment in the crypto market is dead; however, data and analytics have a different story to tell. In a market where everyone is expecting a bull run, BTC’s crash below $90K, crushed all hopes for a bull run, adding more fear into the investors who are already shunning crypto.
CoinMarketCap’s Fear and Greed Index crashed into the extreme fear zone after Bitcoin crashed below $90K. This indicator, which gauges the overall sentiment of the crypto market, was oscillating in the fear zone mostly, while at times visiting the neutral level. But with the latest crash, the traders went into an extreme fear mode.
The total crypto market cap crashed from above $4 trillion to $3.13 trillion, as of the time of writing. With so much value erased from the crypto market, the fear in the hearts of the traders is justifiable.
Speaking to Altcoin desk, Samantha, CEO of NOBI, a crypto investment platform, stated, “This week’s sharp correction looks dramatic, but looking back, every major bull cycle has experienced moments like this.
The market is simply resetting after an extended rally, so liquidity thins out, and everyone rushes for the exit at the same time. But the fundamentals of major assets haven’t changed, as on-chain innovation continues, institutional interest is still intact, and long-term utility remains strong. From an investor’s perspective, this is a time to reassess, not panic.
Extreme volatility is part of a young industry, and episodes like this often mark the beginning of the next phase of growth.”
So here’s a little context for the uninitiated. The crypto market goes into overdrive mode, and the prices surge the very next year after the BTC halving. For instance, after the BTC halving in 2020, there was a massive surge in crypto prices in 2021. Besides, when we go back to the early years, this was the thesis on which the crypto markets functioned. However, the people are in fear as the bull run has not taken effect despite reaching almost the end of 2025, after 2024 halving.
However, according to crypto analyst Dan Gambardello, there did not exist a bull cycle like this. In his video, he states that people are fearing something that did not exist in the first place.
https://twitter.com/dangambardello/status/1990438777781731708
Of course, he agrees that there was a pattern that after every four years, there was a spike in the crypto prices, but that cycle was not dependent on the timeframe, but rather on the Purchasing Managers Index (PMI). This PMI is an indicator used by economists, traders, and other market experts to check the health of the economy.
How does the PMI behave with the BTC price?
Usually, Bitcoin’s price increases in tandem with the PMI, which represents the economy. However, in the current context, there is a divergence between the two. The PMI is slowly growing after reaching a low level, while Bitcoin is consolidating. The crypto market could spring up at any time soon. But what is the current status of the market?
End of the bull or bear market?
Dan states the question is not about whether the bull market has ended, but it should be whether the bear market has ended. With the economy healing and getting better and the quantitative tightening period coming to an end in two weeks, Dan states that we are in a pre-bull market.
Quantitative tightening (QT) is a period where liquidity is sucked out of the market to control inflation. However, with the QT session ending in a few days, the market is well set up for a boom, as it quietly completes its multi-year bear market.
