Crypto Sentiment Hits Rock Bottom: Worse Than 2018, COVID, or FTX Crash?

• Crypto sentiment hits extreme fear as Bitcoin drops 38% and market confidence weakens across platforms.
• Social media voices compare today’s mood to 2018, COVID, and the FTX collapse, citing deeper doubt.
• Macro pressure and liquidation spikes signal emotional capitulation, not yet a structural market breakdown.

The crypto market has entered what many veterans describe as the darkest sentiment period in its history. Bitcoin’s sharp decline from $126,000 to $77,000 has triggered widespread fear across the industry.

DeFi analyst Ignas recently shared his perspective on the current state of crypto markets.

He described the sentiment as more depressing than previous major downturns. This includes the 2018 bear market, COVID crash, and FTX collapse.

The comparison carries weight because each previous crisis had unique characteristics. Yet this time feels different, according to market participants.

Several factors contribute to the overwhelming sense of uncertainty gripping traders and investors.

I personally feel crypto sentiment is the worst.

More depressing than 2018, Covid or FTX crash.

– 2018 was indeed early. Even if we didn’t know if crypto survives, stakes or failure were lower. Our (my) bag exposure was lower.

– Covid crash was severe and for a moment I’d…

— Ignas | DeFi (@DefiIgnas) February 2, 2026

Bitcoin Fails the Macro Hedge Test

The current downturn challenges Bitcoin’s narrative as a macro hedge against traditional finance. Crypto secured everything it chased for years: ETFs, regulatory clarity, and institutional adoption.

Yet Bitcoin crashes while other macro assets climb higher. This creates doubt around the digital asset’s role as a store of value. Ignas noted that without the macro hedge story, Bitcoin’s current valuation seems questionable.

The quantum computing concerns add another layer of existential risk. Institutions that bought into the BlackRock-promoted narrative now face uncomfortable questions.

Bitcoin’s legitimacy as digital gold undergoes its most important test.

Altcoins Face Existential Crisis

The altcoin market confronts a severe credibility problem that extends beyond price action. Belief in alternative cryptocurrencies has collapsed in ways not seen during previous crashes.

Ignas pointed out that after COVID and FTX, investors still loaded up on Ethereum and altcoins. Today’s market tells a different story. Traders believe most altcoins are fundamentally overvalued.

The equity versus token value debate exposes flaws in crypto’s economic models.

Ethereum trades at valuations its fundamentals cannot justify. Competitors chip away at its institutional adoption territory while innovation stagnates.

Market Shows Classic Capitulation Signals

Rain, another crypto analyst, highlighted technical indicators suggesting extreme capitulation. Over $2 billion in liquidations wiped out leveraged positions during the month-long selloff.

Markets are bleeding, fear is peaking, and narratives are fracturing.

But this is where conviction earns its edge

1. Sharp Turn in Sentiment
   Over the past month, Bitcoin has retraced over 38% from its all-time high, falling from $126K to a local low of $77K.

The speed of this… pic.twitter.com/s3DjNj5XvQ

— Rain (@raintures) February 2, 2026

Analysts draw parallels to 2018 and post-FTX bottoms based on current market structure.

Bitcoin hovers near the $75,000-$80,000 zone that some consider long-term value territory. ETF flows have cooled while retail investors remain sidelined.

Data from CoinMarketCap supports the emotional shift. The Fear and Greed Index stands near 15, labeled extreme fear. Past cycles place such levels near consolidation phases. Sentiment often collapses before recovery begins.

Volume patterns show panic selling and forced liquidations.

Price sometimes stabilizes while fear remains elevated. This divergence has appeared in previous cycles. It reflects emotional capitulation rather than structural breakdown.

Fear and Greed Index stands near 15, Source: CoinMarketCap

Depression Stage May Last Longer

The market has entered what Ignas calls a “depression stage” that could persist. Several structural issues compound the psychological toll on investors.

Institutions bypass crypto natives by building proprietary solutions using open-source infrastructure. When companies do acquire blockchain teams, they purchase equity rather than tokens. This leaves existing token holders behind.

Geopolitical instability adds caution to an already risk-off environment. Traders focus on capital preservation instead of speculative plays. The degen culture that fueled previous rallies has evaporated.

DAOs and decentralization experiments face criticism as many projects abandon the “decentralization theater.”

Innovation has plateaued with few radical new concepts emerging. Market exhaustion is real after numerous failed narratives.

Rain maintains that core crypto fundamentals remain intact despite the pain. Decentralized networks, programmable money, and tokenized value continue developing. Builders keep working through the downturn.

The current compression may create opportunities for patient capital to accumulate. Historical patterns suggest extreme fear zones precede strong recoveries. Whether this drawdown marks another cycle low will soon be evident.