From Extreme Greed to Extreme Fear—What Can Crypto Investors Learn from the Index Trend?

The crypto market’s mood has flipped sharply. In just one week, sentiment slid from neutral into fear, as the CoinMarketCap Fear and Greed Index dropped to 39 on September 24, its lowest reading since March. Traders are treading carefully, even as activity in derivatives shows a rush to leverage rather than conviction.

The index fell from 51 last week to 39 today. A one-point drop in the past 24 hours may look small, but the broader weekly decline tells the story; confidence is slipping. This comes even as trading activity heats up. Derivatives volumes spiked 14% over the week, showing that traders are leaning on leverage instead of spot demand.

Derivatives markets with perpetuals volume up 54% in the last 24 hours, reaching $1.42 trillion. By contrast, spot trading fell 31% to $162.95 billion, showing weaker organic demand.

Bitcoin dominance held at 57.72%, which points to altcoins struggling to keep pace. Open interest climbed to $1.07 trillion, signaling excessive leverage in play.

Social sentiment remains balanced at 5.27 out of 10, reflecting a tug-of-war between bullish and bearish narratives. Positive drivers include the approval of Grayscale Ethereum ETFs under updated rules, which analysts like JrKripto highlighted as a breakthrough. Additionally, discussions around new exemptions for crypto products have fueled hopes for regulatory progress by year-end.

However, bearish signals continue to weigh heavily. Analyst CasiTrades, a market analyst, argued that Bitcoin’s breakdown below $113,000 represents a critical inflection point.

She pointed out that support levels in the $96,000 to $100,000 range may offer a rebound.

However, she also warned that a break toward $90,000 would suggest a deeper correction. Her view emphasizes the importance of the coming weeks in shaping medium-term market direction.