A popular indicator for crypto market sentiment has shed its “extreme fear” label as of Friday, reaching its highest point in 21 days, even while trading below $90,000.
The index, which gauges the overall mood in the crypto market, noted a “fear” score of 29 in its Friday update, moving out of the “extreme fear” zone to its peak level since December 12.
As of publication, Bitcoin (BTC) is priced at $88,995.
The positive shift in sentiment is encouraging for the crypto community, with some analysts suggesting that the prolonged period in “fear” or “extreme fear” could indicate that the market is set for potential gains.
Crypto risk-reward ‘best it has ever been’
“Risk/reward is currently at its highest point ever,” crypto entrepreneur Brian Rose remarked in a post on X on December 28, highlighting that the index has remained in fearful territory for eight weeks.
“That’s even longer than during the crash in April 2025,” Rose noted, referencing the period when the crypto market declined sharply after US President Donald Trump announced global trade tariffs.
Crypto traders typically monitor sentiment indicators to gauge the actions of others and determine the optimal times to buy or sell. While fear can signal a good buying opportunity, a shift towards greed might indicate it’s time to sell some crypto.
Crypto analytics platform Santiment reported that crypto market participants approaching 2026 have “mixed feelings.”
“Some lament personal losses while others are celebrating crypto gains and community resilience,” Santiment stated. “The market displays signs of recovery as holders take pride in profits and maintain their commitment. Events and giveaways are enhancing engagement, showcasing optimism despite recent obstacles.”
Other indicators confirm risk-off mode among traders
Additional crypto market indicators suggest a conservative risk appetite among investors.
On Friday, the CoinMarketCap Altcoin Season Index registered a “Bitcoin Season” score of 23 out of 100.
Related: Why Luke Gromen is fading Bitcoin while remaining bullish on debasement
The index toggles between “Bitcoin Season” and “Altcoin Season” based on the performance of the top 100 altcoins relative to Bitcoin over the last 90 days.
According to CoinMarketCap, among the leading 100 cryptocurrencies, Sky (SKY) saw the biggest drop over the week with a 9.73% decline, while Story (IP) experienced the largest gain with a 53.47% increase.
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