Bitcoin BTC$90,949.09 sentiment has deteriorated sharply, plunging into extreme pessimism and signaling the potential formation of a tactical—or interim—market low, according to analytics firm 10x Research.

The firm’s proprietary Greed & Fear Index, which gauges overall market sentiment, has dropped to an all-time low below 5 points. Readings under 10% indicate extreme fear, while levels above 90% reflect excessive optimism.

Crucially, the index’s 21-day simple moving average has fallen to 10%, a threshold that has historically aligned with tactical market bottoms.

“Our 10x Greed & Fear Index has been hovering near its lowest possible reading, and the slower-moving average has now entered the 10% zone—a level that has frequently coincided with tactical lows,” said Markus Thielen, founder of 10x Research, in a statement to CoinDesk.

However, peak pessimism does not always mark the end of a market downturn. Prices may still drift lower, though the rate of decline often slows once sentiment collapses to these extremes.

“Prices can still fall, as they did in March when the indicator bottomed before bitcoin continued sliding into April,” Thielen noted. “Yet bitcoin still delivered a 10% rebound immediately after that initial sentiment low. With sentiment now back at rock-bottom, a similar short-term bounce is possible.”

Bitcoin was trading near $84,800 at press time after dipping to $80,880 on Friday, CoinDesk data shows. Despite the slight recovery, BTC remains down 10% on the week and 23% over the past month.