Did you see that yesterday the crypto fear index dropped to 11? It's near the lowest point in the past year. It was 38 just a week ago, and it dropped really quickly. The total market capitalization also plummeted by nearly $530 billion in 7 days, decreasing from $2.97 trillion to $2.44 trillion.

What's interesting is that both Bitcoin and altcoins were sold off simultaneously. Bitcoin's market share remains around 55%, which indicates that the selling pressure isn't just moving funds into specific coins but is a market-wide sell-off. Looking at the past 12 months, the crypto fear index reached as high as 76 before dropping to 11 this time, confirming that we're in an extreme fear phase.

When sentiment hits such a bottom, it's often seen as a contrarian indicator. Excessive fear can signal the end of a panic sell-off and might even present buying opportunities. However, right now, risks like liquidity crunches and chain reactions of liquidations are also increasing, so additional shocks could lead to higher volatility. Instead of trying to catch the bottom now, it’s better to watch for signals that the market cap is stabilizing or that volatility is calming down.