Fear in the Cryptocurrency Market Has Reached a Peak: What Does This Mean?

Alphractal founder Joao Wedson reported that the Crypto Fear and Greed Index is in the “fear” zone with a score of 29. According to Wedson, while interest in crypto online is decreasing, the influence of derivatives trading on prices is increasing.

In his assessment published on X, Wedson stated that Alphractal’s market sentiment indicator, which analyzes news and social media posts, was at a “very negative” level with a score of 15. He noted that Google searches on various crypto-related topics had fallen to levels not seen since 2023, and the number of views of relevant Wikipedia pages was approaching historical lows. Wedson said that when evaluating this data, it is also necessary to take into account that generative artificial intelligence tools are changing information search habits.

He pointed to spot demand for sustained growth.

Noting that many altcoins have lost value or performed poorly, Wedson interpreted this period of declining investor interest as an accumulation phase. Arguing that reversal signals from technical indicators alone are not sufficient for a sustained rise, Wedson stated that this requires a strengthening of buying in the spot market and an accumulation of activity in on-chain data.

According to Wedson, before 2020, spot and over-the-counter (OTC) transactions were more decisive in price formation. Today, however, derivatives markets play a larger role in price movements. Wedson also suggested that declining interest has led some crypto exchanges to reduce staff, streamline operations, and cut marketing budgets.

“Individual investor interest may return in 2028”

Wedson recalled making a similar assessment in 2022, when the prevailing view was that Bitcoin would not fall below $20,000. He noted that interest in the market remained low for a long time after that period, but predicted that new investment themes could attract capital and individual investor interest could increase again in the next two years.

In his personal scenario for 2028, Wedson said that the period when individual investors turn to buying again could coincide with the period when long-time investors begin selling.

*This is not investment advice.