Signs of gradual recovery from Bitcoin's plunge and altcoin collapse
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According to CoinMarketCap, the Crypto Fear and Greed Index stood at 40 as of the 5th. This indicates that investor sentiment has moved beyond the "fear" phase, but has yet to enter a full-blown optimism phase. A reading closer to 0 indicates extreme fear, while a reading closer to 100 indicates extreme greed.
Cryptocurrency market sentiment deteriorated sharply following the massive market crash on October 10th. Bitcoin (BTC) plummeted from its all-time high of $125,000 to around $80,000, representing a correction of approximately 35% from its all-time high.
The shock to the altcoin market was even greater. Excluding Bitcoin and Ethereum (ETH), the total market capitalization of all altcoins plummeted by approximately 33% in a single day, significantly dampening investor sentiment. As a result, the Crypto Fear and Greed Index plummeted to its November low of 10, reaching the "extreme fear" level.
Since then, the market has gradually stabilized, and by early 2026, investor sentiment has been shifting away from extreme fear. However, experts point out that geopolitical uncertainty and the lack of retail investor participation could pose short-term pressures.
Indeed, global financial markets remain tense following the US military attack on Venezuela earlier this month. The US President announced the successful completion of the military operation targeting Venezuela and President Nicolรกs Maduro.
Despite these geopolitical events, Bitcoin's price has maintained a relatively stable trend. This is seen as an example of the price characteristics of cryptocurrencies that differ from those of traditional financial assets. Typically, risky assets like stocks are immediately subject to downward pressure due to geopolitical shocks.
Market analysts are divided on the impact of this incident on cryptocurrency prices. Some believe Bitcoin will be virtually unaffected, while others believe the reaction of traditional financial markets will have to wait and see after the US stock market opens.
Overall, the cryptocurrency market has emerged from a period of extreme fear, but further macroeconomic stability is needed before a clear upward trend can be established.
Reporter Jeong Ha-yeon yomwork8824@blockstreet.co.kr
