The Crypto Fear and Greed Index reached 40 points on Sunday, breaking out of fear zone for the first time since October, after hitting a Dip of 10 points in November.
Market sentiment in the cryptocurrency market is showing significant signs of improvement as CoinMarketCap 's Crypto Fear and Greed Index moved into neutral at 40 points on Sunday, marking the first time it has left the fear zone since October 2025. This recovery follows a turbulent three-month period during which the cryptocurrency market experienced one of the most severe crashes in history.
The current index reflects a state of equilibrium, indicating that investors are no longer overly pessimistic but also haven't shown clear optimism. This contrasts sharply with the year's low recorded in November, when the index fell 10 points – the "extreme fear" zone. That dark period stemmed from the historic market crash of October 10, 2025, when Bitcoin plummeted from its all-time high of over $125,000 to around $80,000 in just a few days, equivalent to a 35% drop.
The altcoin market suffered far heavier losses. The total market Capital of altcoins, excluding ETH and BTC, evaporated 33% in a single trading session, with many Token losing most of their value overnight. This intense sell-off caused investor panic that lasted throughout the fourth quarter of 2025.
Geopolitical challenges and cash flow in 2026
Despite positive signs heading into 2026, experts warn of potential risks that could hinder the recovery. Increased geopolitical tensions, particularly following Saturday's US attack on Venezuela leading to the arrest of President Nicolás Maduro, are creating an atmosphere of instability in global markets. Furthermore, the lack of investment from retail investors – a group that was once a key driver of the cryptocurrency market – is XEM as a significant drag.
Notably, Bitcoin has maintained unusual stability following the Venezuela incident, contrary to the usual characteristics of high-risk assets which tend to plummet in the face of geopolitical upheavals. President Trump declared: “The United States has successfully carried out a massive attack on Venezuela and its leader.”
Analysts are Chia on the true impact of this event. While some believe the effect on Bitcoin prices will be negligible, others expect a clearer reaction when traditional US financial markets open on Monday. The recovery of the sentiment index to neutral could be a positive sign, but the market still needs more strong catalysts to enter a period of greed and sustainable growth.
