‘Extreme Fear’ Is Back but Bitcoin Price Recovery Depends on: Sentiment

Bitcoin remains caught between reality and expectations of a major rally.

Bitcoin fell to a four-week low on Friday at $65,500 after being rejected from $72,000 a few days earlier, pushing market sentiment back into ‘extreme fear’ territory.

However, Santiment analysts believe this could be the precise push BTC needs to stage a significant recovery.

Fear Rules

CryptoPotato has repeatedly reported over the past few months that the Bitcoin Fear and Greed Index has been in ‘extreme fear’ mode, which was largely expected since the asset fell 50% in the months from its October ATH to early February.

However, there was relief from the issue in 10 days or so, when BTC touched $76,000 on March 18 and $72,000 a week later. However, the subsequent rejection sent it back south again, dropping to $65,500 on Friday for the first time since the beginning of the month.

This meant that BTC, once the best performing non-oil commodity after the start of the war against Iran, erased almost all of the gains posted on the charts during that period. The Index followed suit, as it dropped to ‘extreme levels,’ currently showing 9.

According to Santiment, this may be a blessing in disguise. The analytics firm has doubled down on its belief that BTC tends to move against what the crowd expects from it, which could drive the next leg up.

😨 As Bitcoin dropped to $65.6K for the first time since March 1st, sentiment has moved into ‘panic’ territory among retail traders. Historically, crowd FUD is a necessary ingredient of a rally because markets move against the crowd’s expectations.

👀… pic.twitter.com/w5vdn70hhN

– Santiment (@santimentfeed) March 27, 2026

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Filming the Chase?

With just a few days left in March, bitcoin is on the verge of hitting a record high. Data from CoinGlass shows that its longest streak of consecutive months has been closed in six red zones, marked between August 2018 and January 2019. If BTC ends in March below about $67,000, where it is currently placed, it will tie that record, as it has been deep in negative territory since October.

History shows that BTC went on a remarkable run after such an event that happened in 2018/2019. In fact, it has had five consecutive months in the green, four of which generated double-digit profits. May 2019 stands out as the best performing month since then, with a massive 52% surge.