Morning Minute: Crypto slides into ‘extreme fear’ as Bitcoin tumbles

Morning Minute is a daily newsletter written by Tyler Warner. The analyzes and opinions expressed are his own and do not necessarily reflect those of Decrypt. Subscribe to the Morning Minute on Substack.

GM!

Today’s most important news:

• Crypto majors down another 3-8%; BTC at $104,500
• Fear & Greed reaches Extreme Fear for the first time in months
• Berachain shuts down its blockchain after Balancer exploit
• Strategy has announced its latest financial instrument STRE
• MegaETH is preparing to issue $1.3 billion in refunds

😨 Crypto slides into “extreme fear”

Crypto sentiment has collapsed.

Does this mean the bottom is close?

📌What happened

The Crypto Fear & Greed Index shows that the market is now in the ‘Extreme Fear’ area with a score of around 21.

This marks a dramatic change from the recent “Greed” levels from last month and the neutral ratings from just a few days ago.

For those unfamiliar, the index measures six key signals every day: Volatility, Volume/Momentum, Social Media, Surveys, Dominance, and Trends.

It now says:

• Volatility has increased
• Volume and momentum have collapsed
• Social indicators light downward
• Bitcoin’s dominance is increasing, meaning money is fleeing to the perceived safety of BTC
• Trend data shows spikes in searches like ‘Bitcoin price manipulation’

This comes just a day after new data emerged showing that long-term Bitcoin holders sold approximately $40 billion worth of Bitcoin (405,000) in October.

🗣️What they say

“Extreme fear could be a sign that investors are worrying too much. That could be a buying opportunity.” – Alternative.ME site

🧠Why it matters

Sentiment often dictates behavior, which in turn influences flows, liquidity and ultimately price.

• Risk-to-flow models: When fear reigns, investors wait on the sidelines even as ETFs are launched or infrastructure expands. That slows down capital.
• Liquidity stress: extreme fear is often accompanied by liquidations, margin explosions and forced sales (see October 10 and its consequences)
• Narrative reset: We talked about “institutional adoption” and “ETF expansion.” Now the narrative is shifting to ‘survival, consolidation, risk management’.

What does this mean for the short term?

Historically, when the index sinks deep into fear, it can precede the next rise, as long as other factors align.

That’s your ‘buy the fear’ signal.

It’s hard to predict what that specific signal will be at this point, but be on the lookout.

It can be as simple as monitoring the outflow of OG holders.

They just dumped $40 billion on the market with only ~$4 billion in ETF + DAT buying pressure to offset it. And Bitcoin still remained at $107,000.

That’s bullish.

Once these holders finish selling (or at least take a break), there will be a new base for Bitcoin to march higher on.

And once the price rises above $120,000 again, the four-year cycle is officially broken. That is the intention to grind higher in 2026.

Expect more time in the fear range for now.

But this too shall pass…

🌎 Macrocrypto and memes

A few Crypto and Web3 headlines that caught my attention:

In corporate bonds/ETFs

In Memes

• Memecoin Leaders are very red; DOGE -5%, Shiba -5%, PEPE -6%, PENGU -9%, BONK -9%, TRUMP -7%, SPX -17% and FARTCOIN -18%
• jelly jelly (+77% to $195 million) led Solana movers; ZEREBRO +35%, ARC +27% and SPSN (+100%) were other notable gainers

💰 Token, airdrop and protocol tracker

Here’s an overview of the top token, protocol and airdrop news of the day:

🚚 What’s happening in NFTs?

Here is the list of other notable headlines of the day in NFTs:

• NFT Leaders were very red; Punks -1% at 36.5 ETH, Pudgy -5% at 5.5, BAYC -9% at 5.8 ETH; Hypurr’s -12% at 845 HYPE
• No significant movers
• Adam Weitsman has taken over the CryptoDickButts project