Cryptocurrency Market Extremes and Reversals: The Battle for Bitcoin and Ethereum Bottoms

According to the latest market analysis, the current crypto market is at a highly sensitive critical point. The sentiment cycle in the virtual asset market often determines short- to medium-term trends, and based on current data, the fear index has reached a rare low. Market participants should be alert that this extreme pessimism often harbors unexpected turning points.

Market Fear Reaches Bottom, Bitcoin Seeks Breakthrough Under Pressure

Bitcoin is currently hovering around $66,590, after a noticeable pullback following yesterday’s surge. However, a recent report from Matrixport provides a key signal: market fear sentiment has dropped to its lowest level in four years. Historical experience shows that when market sentiment reaches extremes, it often indicates that the selling pressure is waning. This suggests that the momentum for further decline may be fading, and a potential rebound window is forming.

The apparent price weakness masks a deeper shift in market dynamics. Many large institutions and whale holders are currently facing unrealized losses, but this phase of pressure historically often precedes a mid-term bottom. In other words, the current pain may be a sign that the market is preparing for a reversal.

On-Chain Data for Ethereum Reveals Bottom Formation Signals

Ethereum’s situation is equally noteworthy. On-chain data clearly shows that various Ethereum whales are currently in a state of being underwater. While this increases the potential risk of selling pressure on the surface, from another perspective, this extreme pessimistic holding situation indicates that the market has entered a stage of intense pressure.

Analysts generally believe that when large holders are all in a loss position, it can actually serve as a support level. They are either waiting for a rebound or have already given up chasing higher prices, greatly weakening the downward force. Therefore, the current on-chain predicament for Ethereum is actually an important signal of bottom formation.

When both Bitcoin and Ethereum face extremely pessimistic market sentiment, and on-chain data shows widespread losses among holders, the market is often at a critical juncture. The next move will depend on whether it can break through the current psychological barrier.