‘Extreme fear’ returns to Bitcoin – Binance’s CZ sees a reward, not a warning

ambcryptoPublished on 2025-12-25Last updated on 2025-12-25

Abstract

Bitcoin is ending 2025 in a state of 'extreme fear' with its second-worst Q4 performance in history, declining 23%. Binance founder Changpeng Zhao (CZ) views this fear as a buying opportunity, not a warning, encouraging investors to 'buy the fear' rather than extend FUD. He and historical data suggest that past periods of extreme fear, like in September 2024 and Q1 2025, were followed by significant price surges. However, analysts are split on Bitcoin's 2026 outlook, with some, like Jim Cramer, remaining bearish. Mining metrics indicate potential for a rebound if ETF demand resumes, though macro factors like the U.S. tax season could influence the recovery.

Bitcoin is ending 2025 in ‘extreme fear’ alongside the second-worst Q4 performance in history. The asset has declined by 23% this quarter, second only to 2018, which saw a 42% drop.

However, in his Christmas message, Binance founder, Changpeng Zhao ‘CZ’, encouraged demoralized traders and investors that this was the time to ‘buy the fear’, not extend the FUD.

“Guess what, those who bought early did not buy at ATH, they bought when there were fear, uncertainty and doubt.”

Is a BTC reversal likely?

Well, past ‘extreme fear’ levels were opportunities, as CZ stated. The most recent scenario was in September 2024, when Bitcoin [BTC] traded at $54K. By the end of 2024, BTC doubled and surged above $100K.

In Q1 2025, another ‘extreme fear’ linked to Trump tariff wars offered a discounted buying window. The asset dropped to $77K in Q1, but later rallied to over $126K by October.

So, if history repeats itself, this could be another opportunity.

But other analysts believe BTC could slip lower and the bearish grip could extend into Q1 2026. In fact, market commentators such as Jim Cramer are 100% bearish on BTC.

But his bearish stance has always been used as a contrarian bet and a bottom signal on the asset.

That said, the overall consensus among analysts was nearly split 50/50 on BTC’s path forward into 2026.

Miner selling pressure signals...

Even so, a key correlation date between BTC price and miner price and production cost suggested that a recovery could be likely.

For the unfamiliar, miner price is the level that BTC should be for miners to be healthy, lose it a miner capitulation and sell-off could drag BTC lower.

On the other hand, the production cost refers to the average cost needed to produce 1 BTC, which covers power, mining rigs and other computational resources, among others.

In the past, BTC’s bear market drawdowns didn’t overstay below these levels, especially the production cost, which was at $80K at the time of writing.

In fact, currently, the miners were holding off any sell-off, as illustrated by the Miners’ Position Index (MPI).

This could allow recovery to continue if ETF demand resumes. But it remains to be seen whether the U.S tax season in Q1 2026 and other macro updates will cap the rebound.

Final Thoughts

  • Past ‘extreme fear’ levels have been remarkable BTC buying opportunities, and CZ believe the trend will continue.
  • Mining sector dynamics suggested BTC had the chance to recover if macro improves and bearish sentiment reverts.

Related Questions

QWhat is the current market sentiment for Bitcoin according to the article, and how does CZ view it?

AThe current market sentiment for Bitcoin is 'extreme fear'. Binance's CZ views this not as a warning, but as a reward and a buying opportunity, encouraging investors to 'buy the fear'.

QHow does the article use historical data to suggest the current 'extreme fear' could be an opportunity?

AThe article cites two recent examples: in September 2024, Bitcoin doubled in price after an 'extreme fear' period, and in Q1 2025, it rallied significantly after a similar event, suggesting history could repeat itself.

QWhat is the significance of the miner production cost and miner price for Bitcoin's potential recovery?

AThe miner production cost (around $80K) is the average cost to produce one BTC. Historically, Bitcoin's price doesn't stay below this level for long. The 'miner price' is the level needed for miners to be healthy; staying above it prevents capitulation and sell-offs that could drag the price lower.

QAccording to the article, what is the general consensus among analysts regarding Bitcoin's price path into 2026?

AThe overall consensus among analysts is nearly split 50/50 on Bitcoin's path forward into 2026, indicating significant uncertainty and divided opinions on its future performance.

QWhat potential factors could cap a Bitcoin price rebound in Q1 2026?

AThe U.S. tax season in Q1 2026 and other macroeconomic updates are mentioned as potential factors that could cap a Bitcoin price rebound, even if ETF demand resumes.

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