Current market sentiment is Fear (CMC Fear & Greed Index: 25/100). Key highlights:
Fear & Greed Index – Drops to 25 (from 28 in 24h), signaling extreme risk aversion.
Macro Headwinds – Regional bank stress and trade tensions weigh on crypto prices.
Derivatives Activity – Open interest down 6.16% in 24h despite 20.6% volume spike.
Deep Dive
1. Fear & Greed Index at Extreme Fear
Overview: The CMC Fear & Greed Index fell to 25/100 (Fear) as of October 18, down from 28 yesterday and 35 last week (View CMC F&G). This marks the lowest reading since March 2025 (15/100).
What this means: This is bearish because prolonged fear historically correlates with capitulation phases, though contrarians watch for potential reversal signals.
2. Macro Risks Amplify Sell-Offs
Overview: Bitcoin fell to $103.5K (18% below its ATH) amid U.S.-China trade tensions and regional bank stress. Strike CEO noted Bitcoin’s price action reflects “smelling trouble” in traditional finance (MisterSpread).
What this means: This is neutral-bearish because crypto remains tied to macro risks, but potential Fed liquidity injections could reverse sentiment.
3. Derivatives Show Caution
Overview: Total derivatives open interest dropped 6.16% to $976.55B (24h), while volume surged 20.6% to $632.96T – a pattern suggesting position unwinding rather than new bets. Average funding rates turned negative (-0.00056313%), indicating bearish leverage.
What this means: This is bearish because declining open interest during price drops often signals weak conviction in a rebound.
Conclusion
Market sentiment is currently bearish, driven by macro uncertainty, fear-driven liquidations, and deteriorating technicals. However, Bitcoin’s 200-day SMA ($3.51T total market cap equivalent) and oversold RSI14 (30.31) suggest potential stabilization zones. Monitor the CMC Fear & Greed Index for a sustained move above 40/100 to confirm sentiment recovery.
