- Bitcoin fear and greed index printed 32 (Fear) as BTC hovered near $110,000, pointing to risk-off conditions.
- A $19 billion futures deleveraging flushed leverage, open interest fell, ETF inflows softened, and LTHs distributed.
- Traders watched $117,000 to $114,000 as the cost-basis band and the $111,000 to $110,000 handle for near-term direction.
The crypto market has once again slipped into fear territory, with the Fear and Greed Index plunging to 32. Bitcoin, unable to sustain momentum above $111,000, trades near $110,000 at the time of writing, down more than 2% in the past 24 hours.
The decline follows a steep correction from the $126,100 peak, which marked a new all-time high before being swiftly reversed by one of the largest futures deleveraging events in Bitcoin’s history.
A Historic $19 Billion Flush and Market Reset
According to Glassnode, Bitcoin’s rally reversal coincided with a staggering $19 billion futures deleveraging event, a magnitude rarely seen even during past market shakeouts.
The move has forced the market into a structural reset. Futures open interest collapsed to multi-month lows, funding rates plunged to levels last observed during the FTX collapse, and volatility surged to 76% as traders ran to hedge their positions.
The drop below the $117,000–$114,000 cost-basis zone placed many recent buyers back in loss, intensifying selling pressure and undermining short-term confidence. Long-Term Holders (LTHs) have been steadily distributing since July, realizing profits of approximately 300,000 BTC.
Meanwhile, ETF inflows have softened, down by roughly 2,300 BTC this week. However, despite these bearish signals, the nature of the current correction appears more constructive with spot trading volumes skyrocketing and the sell-off remains largely controlled.
Notably, while Binance experienced heavy taker sell pressure, Coinbase, a key venue for US firms, recorded net buying.
$250K by December-end?
Bitcoin’s weekly chart shared by analyst Ali Martinez reveals a bearish divergence between price and the Relative Strength Index (RSI), similar to the structure observed before the 2021 correction.
Price has been forming higher highs, while RSI has trended lower, indicating waning momentum. Yet, Martinez interprets this not as a signal of incoming BTC price crash but as a possible sign of a hidden accumulation phase.
Although BTC is down almost 9% in the past week, Martinez predicted that Bitcoin can still climb toward $250,000 by December 2025. The thesis rests on the idea that the recent shakeout serves as a macro reset rather than a full-blown reversal.
Related: Bitcoin (BTC) Price Prediction: Bulls Defend $111K as Analysts See Catch-Up With Gold
Fear as a Contrarian Indicator
Historically, extreme fear has often coincided with accumulation zones. During similar phases in late 2022 and mid-2023, Bitcoin’s price stagnated amid negative sentiment before igniting powerful rallies months later.
The current fear reading of 32, combined with historic deleveraging, mirrors those reset environments where weaker hands are flushed out, and long-term investors quietly build positions, Glassnode added.
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