"Bitcoin Fear Index" drops to the lowest point: the truth behind asset transfer amid market anxiety

In mid-November 2025, the crypto market experienced a shock. The Bitcoin greed index once dropped to 9, the lowest level since the COVID-19 pandemic. Even more astonishing to investors was that despite Bitcoin prices still remaining above $90,000, the market’s displayed panic level was comparable to when the price was only $5,000 in 2020. As of January 2026, although the market has rebounded from the bottom, with BTC prices stable around $90.11K and a 24-hour increase of +1.09%, the lingering questions from that panic event remain unresolved: why did such a paradox occur?

Triple Impact: From Macro Storms to Internal Disintegration

This market anxiety did not come out of nowhere but was the result of multiple factors acting together.

External Shock: Liquidity Drained

First, from a macroeconomic perspective. Investors generally expected the Federal Reserve to start cutting interest rates in December, viewing it as the last hope to rescue risk assets. However, the Fed’s hawkish stance shattered this expectation. In a high-interest-rate environment, market liquidity continued to tighten, forcing risk-seeking investors to withdraw funds from cryptocurrencies, tech stocks, and other sectors.

Worse still, the US government’s 43-day shutdown caused severe delays in releasing key economic data. Both investors and the Fed fell into a “blind flight” mode; the market’s greatest fear was not bad news but the inability to see the situation clearly. This uncertainty forced fund managers to adopt risk-averse strategies.

Meanwhile, global tech stocks, especially AI-related shares, experienced significant corrections. SoftBank’s massive sell-off of Nvidia shares sparked concerns about an AI bubble burst. To institutional investors, cryptocurrencies and tech stocks are both high-risk asset baskets, and they are liquidating both simultaneously.

Internal Disintegration: Narrative Foundations Cracking

If macro factors form the background, then internal changes within the crypto ecosystem are the direct trigger. This bull market was built on two core narratives: first, institutional entry represented by spot ETFs, symbolizing traditional finance’s recognition of crypto; second, the long-term holding belief exemplified by “diamond hands,” which was thought to be held by steadfast investors unlikely to sell easily.

However, both pillars began to show cracks.

Bitcoin spot ETFs were seen as the engine of this bull run, but in November 2025, this “engine” suddenly started reversing. Data shows that in just November, net outflows from Bitcoin ETFs exceeded $2.3 billion. On November 13 alone, net outflows reached $866-870 million, one of the worst records since listing. On-chain analytics firm Glassnode confirmed ETF flows had turned to “moderately negative.”

Even more concerning, long-term holders began a rare large-scale sell-off. On-chain data indicated that in early November, long-term holders sold approximately 815,000 BTC. Data from Santiment further confirmed that since October 12, whale wallets had sold about 32,500 BTC.

When the market sees the “market rescue hero” (ETF) fleeing and the “believers” (whales) cashing out, panic becomes a natural emotion. The Bitcoin greed index falling into single digits is a quantitative reflection of this dual confidence crisis.

Asset Shift Beneath the Panic

But there is a key misconception here: “surrender” does not mean “everyone is selling.”

On-chain data clearly shows a split is happening. A complex and intense asset transfer is underway.

Who is reducing holdings?

Mid-sized whale groups (holding 10 to 1,000 BTC) turned into net sellers in November. Santiment data suggests these holders are likely early investors with substantial profits, choosing to cash out amid macro uncertainty. Meanwhile, retail investors who entered late in the bull market are also panic-selling, which is the true picture behind the large ETF outflows.

Who is increasing holdings?

Interestingly, while mid-sized whales are reducing, the largest strategic entities (holding over 10,000 BTC) continued to accumulate in November, with a net increase of 10,700 BTC. Data from CryptoQuant is even more striking: during the market decline, institutional whales set the second-largest weekly accumulation record of 2025, net adding over 45,000 BTC.

At the same time, some steadfast small investors did not panic. Retail wallets holding up to 10 BTC continued to accumulate during the downturn. At the height of market panic, Bitcoin advocate Michael Saylor’s company announced on November 10th the purchase of 487 BTC worth $50 million, publicly dismissing rumors of a sale.

The essence of asset transfer

This is not a simple sell-off wave but a process of asset ownership shifting from weak-faith, emotional traders to confident, rational long-term investors. When panicked sellers exhaust their ammunition and rational buyers fully take over the market, the true market bottom is formed. The single digits of the Bitcoin greed index are the most intense moment of this transfer.

Wisdom from History: Extreme Fear as a Signal

The father of value investing, Warren Buffett, famously said: “Be fearful when others are greedy, and greedy when others are fearful.”

The core of this principle is based on rational valuation judgment. When the market is in extreme emotion, asset prices often deviate from fundamentals. The Bitcoin greed index dropping into single digits (like the recent 9) is a data-driven warning: the market is in irrational extreme fear, and this is the time savvy investors should consider contrarian actions.

How does historical data respond to this signal?

Several of the most notable extreme fear moments in crypto history provide clear answers:

• During the COVID-19 panic, the index hit lows and was followed by months of sustained rebound
• The 2022 FTX collapse pushed the index to a historic low of 6, after which the market remained at the bottom for over 90 days before reversing
• Every time the index hits extreme fear, investors who start positioning and hold for at least 180 days (six months) have achieved significant positive returns

The lesson is clear: selling when the Bitcoin greed index drops into single digits has repeatedly proven to be a mistake. Conversely, gradually accumulating during this period, though requiring patience and mental resilience, has a very high success rate.

Rational Response: Discipline Over Precision Timing

How should rational crypto enthusiasts act in the face of “extreme fear”?

First, recognize an important limitation: the Bitcoin greed index is not a crystal ball. It cannot predict the market’s exact next move; it only reflects current sentiment. It is a lagging indicator, showing what has already happened. Never base trading decisions solely on this indicator.

But its true value lies elsewhere — as a psychological countermeasure.

When the index rises to 90 (extreme greed), it warns you: the market may be overheated; consider taking profits rather than chasing highs. When the index drops to 10 (extreme fear), it asks: is the market really cold and irrational? Is this a panic sell or a discount others are offering?

Financial markets swing violently between greed and fear. Today, the pendulum is firmly at the “extreme fear” end. Your task is not to predict the exact turning point but to use data and strategy to counteract the emotional pull when the pendulum swings to any extreme.

The most practical approach is dollar-cost averaging (DCA) — gradually deploying capital over time rather than trying to time the market precisely. This avoids the risk of missing out on entries and reduces psychological stress. Maintaining discipline amid market noise is often more important than precise predictions.

Conclusion

The market panic in November 2025 drove the Bitcoin greed index to its lowest point since the pandemic, stemming from the Fed’s hawkish stance tightening liquidity, record ETF outflows, and rare whale sell-offs breaking two major confidence pillars.

Yet, on-chain data reveals the truth: behind the surface “surrender,” a major asset transfer is underway. Weak-faith traders are selling, while genuine long-term investors are actively accumulating. Institutions, large holders, and steadfast retail investors are voting with their real money.

For rational investors, history and data point to a consistent conclusion: extreme fear is not the time to flee but the time to reassess and strategically position. Both Buffett’s wisdom and crypto historical records confirm this.

The best current strategy is not blind bottom-fishing nor panic selling but combining dollar-cost averaging with disciplined behavior amid extreme market sentiment. Every extreme reading of the Bitcoin greed index is the ultimate test of investor psychology.