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Crypto Market Shows Early Recovery Signs After Prolonged Fear Phase
A key crypto market sentiment indicator is showing early signs of stabilization, climbing out of “extreme fear” territory as Bitcoin continues to trade below the $90,000 mark.
Crypto Fear & Greed Index Shows Improvement
As of Friday, the widely followed Crypto Fear & Greed Index recorded a score of 29, marking a shift from “extreme fear” to “fear.” This represents the index’s highest level in 21 days and its strongest reading since Dec. 12, suggesting a modest recovery in overall market sentiment.
Despite the improving mood, Bitcoin (BTC) remains under pressure. At the time of publication, Bitcoin was priced at $88,995, still below the psychologically significant $90,000 level.
Analysts Point to Prolonged Fear as a Notable Signal
The recent sentiment shift follows an extended period of caution among traders. Crypto entrepreneur Brian Rose highlighted in a Dec. 28 post on X that the index had remained in fearful territory for eight consecutive weeks, calling the current risk-reward environment “the best it has ever been.” He noted that this stretch of fear exceeded the downturn seen during the April 2025 crypto market crash, which followed US President Donald Trump’s announcement of global trade tariffs.
Market participants often use sentiment indicators to gauge crowd psychology, with prolonged fear historically drawing close attention from traders monitoring potential turning points.
Mixed Emotions Across the Crypto Community
According to crypto analytics firm Santiment, sentiment heading into 2026 reflects a divided market. While some participants are dealing with personal losses, others are celebrating gains and long-term resilience within the crypto ecosystem. Santiment noted that community events and giveaways have helped boost engagement, contributing to cautious optimism despite recent challenges.
Risk-Off Signals Persist in Broader Market Indicators
Other metrics suggest traders remain defensive. The CoinMarketCap Altcoin Season Index posted a “Bitcoin Season” score of 23 out of 100 on Friday, indicating that Bitcoin has continued to outperform most altcoins over the past 90 days.
Among the top 100 cryptocurrencies, Sky (SKY) recorded the steepest weekly decline at 9.73%, while Story (IP) led gains with a 53.47% increase, underscoring uneven performance across the market.
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