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

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. 

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.