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|3 min ReadCrypto Sentiment Nosedives to ‘Extreme Fear’ as Bitcoin Drops Under $106K
Carter Hayes
Senior Analyst
Published
Jan 16, 2026
The Crypto Fear & Greed Index plummeted by 21 points to "Extreme Fear," marking the lowest level in seven months.
The Crypto Fear & Greed Index dropped from 42 to 21 points in a single day on Tuesday. Source: Alternative.me
What Happened?
On Tuesday, Bitcoin briefly fell below $106,000 for the first time in over three weeks. This drop triggered a significant fall in the Crypto Fear & Greed Index, which dropped to 21 out of 100, signaling "Extreme Fear" in the market.
At its 24-hour low, Bitcoin slid to 109,000. It has since recovered slightly, currently trading above $106,500, according to CoinGecko.
This marked the lowest Fear & Greed Index in nearly seven months, with the last comparable drop being on April 9, when the index fell to 18 out of 100 due to global market reactions to President Donald Trump's tariffs.
"Extreme Fear" When Bitcoin Slips
The Fear & Greed Index had previously reached "Extreme Fear" on October 22, scoring 25 out of 100 after Bitcoin dropped from 108,000. The index has fluctuated between "Extreme Fear" and "Neutral" since the October 9-10 market crash, during which Bitcoin cooled rapidly from its October 6 peak of over $126,000.
The last time the index was in "Neutral" territory was before the early October crash, reaching a high of 74, which indicates "Greed" on October 5.
Reasons Behind the Dip
Analysts have pointed to reduced institutional demand and lower blockchain activity as key factors behind Bitcoin’s recent dip. Additionally, concerns over an increasingly hawkish Federal Reserve are weighing on market sentiment.
Although the Fed cut interest rates for the second time this year on Wednesday, it signaled that there may not be further rate reductions in 2025, which disappointed many crypto investors who had hoped for more cuts.
Last week, Bitcoin-tied exchange-traded funds (ETFs) saw nearly $800 million in net outflows, with institutional buying dipping below the daily mined Bitcoin supply for the first time in seven months.
Optimism for November: "Moonvenber"
Despite the current dip, crypto bulls are hoping for a "Moonvenber" — a term used for November, historically one of Bitcoin's best months. On average, Bitcoin has gained over 42% in November, making it its strongest month for growth.
As market sentiment hovers at "Extreme Fear," the outlook for the coming weeks remains uncertain, but the historical trend offers some hope for a rebound.
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