Key Takeaways
What do current “fear’ levels mean for BTC?
The market remains cautious amid continued correction.
Is there any chance of a recovery?
If past trends repeat, on-chain data suggested a potential rebound was likely.
Bitcoin’s [BTC] mid-week plunge below $100K, deepened market fears to levels seen during the early 2025 tariff wars.
Although bulls defended $100k and recovered slightly as of writing, the Crypto Fear and Greed Index (CFGI) improved slightly.
In the past few hours, the market sentiment barometer shifted from an “extreme fear” level of 23 to a “fear” zone of 27.
This underscored that the broader market was still cautious, but slightly easing. Over the past few weeks, BTC has lost 22%, slipping from a peak of $126k to $98.9k before reclaiming $100k again.
Source: CryptoQuant
But these fear levels also tend to mark local bottoms or massive discounted opportunities. So, is the right time to ‘buy the fear’ now and sell when everyone is ‘greedy’?
Is it time to buy?
The current levels are a juicy-discounted opportunity, especially for BTC. According to the valuation model, True MVRV levels below 1.5 marked past local bottoms in early 2025 and mid-2024.
In contrast, past readings above 2 suggested an overheated market that marked out past local tops. As of writing, the True MVRV sat at 1.38, implying that a rebound could be likely if past trends repeat.
Source: CryptoQuant
Another potential catalyst was the standby liquidity. According to CryptoQuant, stablecoin reserves on the Binance exchange reached a 9-month high of nearly $10 billion.
This meant there was ample liquidity that could be injected into the market if sentiment and the macro front improve.
Source: CryptoQuant
That said, most of the recent sell-off has been concentrated largely on the Binance exchange, according to most market watchers.
Given that the exchange drives most of the price discoveries and momentum, AMBCrypto checked the current selling pressure to gauge if a broader recovery was likely.
As of press time, about 3,000 BTC were being sent to the exchange on a daily average for dumping.
Although there were signs of tapering, as shown by the easing of Exchange Netflow, a sharp drop in the metric could confirm renewed buying pressure.
Source: CryptoQuant
