Sentiment Split and Data Delays Blast Open a Fragile Market

Extreme Fear hit 11 as market polarization, weak buyer quality, and reduced December rate-cut odds fueled Bitcoin’s massive plunge.

Crypto markets saw one of their sharpest declines in recent months as a series of overlapping weak factors triggered heavy selling and pushed Bitcoin (BTC) briefly down below $82,000.

According to CryptoQuant, the drop was not driven by any single major headline but by a convergence of sentiment extremes, macro uncertainty, and on-chain stress.

Bitcoin’s Sharpest Drop in Months

Social platforms reflected a complete disappearance of neutral sentiment, as traders remained split between ultra-bearish calls for $20,000-$70,000 and ultra-bullish forecasts of $100,000-$130,000. This “fragile sentiment vacuum” created an environment where even small shocks produced outsized price reactions.

An important factor came from the US Labor Department’s decision to release both October and November jobs data only on December 16, which left the Federal Reserve without crucial information ahead of policy decisions and sharply increased uncertainty across markets. Equities and risk assets sold off in tandem.

Meanwhile, on-chain indicators pointed to further weakness. For instance, the Coinbase Premium Index plunged deep into negative territory. This suggested fading institutional demand and growing dependence on retail-driven flows from Binance.

CryptoQuant also stated that Short-Term Holder whales are carrying $21.5 billion in unrealized losses, which is their largest drawdown in years. The latest leg down was fueled by short-term capitulation, confirmed by a surge in taker sell volume and panic-driven market orders. The Fear & Greed Index has now dropped to 11, firmly in Extreme Fear territory.

Next Battle Zone

Following the corrective phase, Binance spot volume data shows a new trading range forming between $70,000 and $90,000, and the Point of Control is now near $83,000, a level expected to attract short-term price consolidation as the market searches for stability.

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While Bitcoin may pause around this area, the main downside target remains the $70,000-$73,000 support band. This zone carries significant technical weight and is validated by on-chain metrics, particularly the Realized Price of whale holders with 100-1,000 BTC, whose average acquisition cost sits close to $71,000.

Historically, this cohort has defended such levels, which makes it a decisive test for the market’s mid-term trajectory.