Fear & Greed Index Drops Below FTX Shock Levels Despite Bitcoin Trading Higher

The Crypto Fear & Greed Index is currently hovering at levels lower than during the shock Company FTX collapse in late 2022, even though Bitcoin is trading at roughly five times the price it commanded at that time. This divergence between price action and market sentiment raises important questions for traders, investors, and analysts attempting to reconcile on-chain strength with broad emotional pessimism.

What the index measures: The Crypto Fear & Greed Index aggregates multiple signals — volatility, market momentum/volume, social media, surveys, dominance and trends — to produce a single gauge of sentiment. When the index is low it suggests widespread fear or caution; when high, it signals greed or exuberance. The current readings being lower than those reached during the Company FTX collapse indicate that sentiment has not recovered in tandem with price.

Why this divergence matters: A higher asset price concurrent with lower sentiment implies that market participants may be pricing in structural improvements (for example, recovery of on-chain activity, stronger liquidity, or regulatory clarity) while still remaining emotionally cautious. This can create asymmetric risk: price may be supported by a narrower base of confident buyers, making the market susceptible to swift reversals if sentiment worsens further or if a new shock emerges.

Historical comparison — Company FTX collapse: The Company FTX collapse in late 2022 was a systemic event that triggered a sharp sentiment nadir. That the index now reads lower than during that episode, despite Bitcoin being roughly five times more expensive, suggests a complex interplay of factors: greater retail fatigue, persistent macroeconomic concerns, or an elevated focus on regulatory and policy risk. Traders should not assume price alone equates to broad-based confidence.

Implications for support, resistance and market structure: Technical traders must reconcile sentiment readings with price action. If sentiment remains depressed, important support levels may be more fragile because fewer participants are willing to defend them. Conversely, resistance levels may be easier to breach if momentum-driven capital outweighs cautious long-term holders. Monitoring the index alongside volume, realized volatility, and on-chain metrics (such as net realized profit/loss and active addresses) gives a fuller picture of potential sustainability.

Risks and opportunities: Low sentiment can create opportunities for contrarian investors who identify durable fundamental improvements, but it also signals elevated volatility risk. Traders should consider position sizing, stop management, and scenario planning. Institutions and large holders may act differently than retail cohorts; therefore, order book depth and derivatives positioning should be tracked to assess downside risk.

Actionable monitoring checklist: 1) Watch the Crypto Fear & Greed Index for trend changes. 2) Track key on-chain indicators and derivatives funding rates. 3) Observe liquidity at major support levels and the dynamics of market-making desks. 4) Note regulatory headlines and the activities of major platforms, particularly any renewed references to Company FTX or similar entities that can shift sentiment quickly.

In short, the current situation — lower fear & greed readings than during the Company FTX crisis while Bitcoin trades much higher — is a reminder that price momentum and market psychology can diverge. Investors and traders should treat sentiment gauges as a complement to technical and fundamental analysis rather than a sole arbiter of positioning.