What the Macro Environment Is Quietly Setting Up Next

⭐ Fear & Greed Collapse

When you zoom out and look at the current macro environment, we’re living through one of those “everything sucks” phases that every cycle brings.

The Fear & Greed Index falling from elevated greed to extreme fear in under two months isn’t something you see often, around 15 points.

The macro environment is sitting at its lowest sentiment point since the Terra - Luna implosion in 2022. Back then, every chart looked ugly, every analyst turned bearish, and every retail investor was convinced the world was ending. LOL!!!

Historically, crypto almost never stays in Extreme Fear for more than a month. This is one of those rare things in the macro environment where the patterns are consistent whether you look at 2013, 2018, 2020, or 2021.

And we’ve already been locked in fear since November 10, which puts us right in that 2 - 3 week window where reversals tend to happen.

That doesn’t mean you or I should expect an instant V-shape - a bounce-back moment tomorrow. The macro environment can still give you chop, fakeouts, messy volatility, and those annoying “final flush” dips.

But even if you strip out emotion entirely and only look at market signals, what’s happening now is classic sentiment bottom behavior.

Think back to 2021 for a second. It’s easy to remember that period as the most absurd, euphoric, pick-any-token-and-it-goes-up bull run in crypto history.

But people forget the part where from May to July 2021, Bitcoin sat in a brutal Fear–Extreme Fear loop. The macro environment looked horrible and everyone convinced themselves that the bull run was dead. And then BTC doubled in a few months.

That entire pattern started with the exact same kind of market signals we’re seeing right now.

So yes, this current macro environment sucks.

And yes, it might get slightly worse before it gets better. Not guarantees, but opportunities. And the market signals we’re seeing are the exact ingredients that often precede medium-term trend reversals.

Before you read on, I hope you can give me a quick vote so I know whether I should keep improving and bring you even better content:

👀 The 50W SMA Breakdown

Another thing people are freaking out about in the current macro environment is Bitcoin closing below the 50-week simple moving average (50W SMA).

Whenever Bitcoin $BTC.X ( ▼ 0.32% ) dips under its average yearly price level, traders instantly call it a bearish breakdown. And sure, closing below the 50W SMA has historically been a market signal that tells you a reversal trend is coming.

But ignoring context is exactly how investors misread the macro environment.

Closing below the 50W SMA is not automatically a “we’re going into a multi-year bear market” event.

In fact, when you go back through the last three major cycles, you’ll notice something that most traders never talk about: the 50W SMA has triggered both massive bull runs and major downturns.

In 2020, Bitcoin closed below the 50W SMA for two months, and then went on to 16x.

In 2021, we dipped below the 50W SMA again. Everyone panicked but BTC ripped to new all-time highs anyway.

The biggest question people ask me is:
“Why did the 50W SMA breakdown in 2020 and 2021 lead to new highs, but 2022 didn’t?”

Simple.

In 2020 and 2021, global liquidity was expanding aggressively. Money was flowing everywhere. The macro environment was full of oxygen. In 2022, the oxygen was removed.

This is why reading market signals without reading the macro environment is a losing strategy.

Fast forward to now, and we’re once again below the 50W SMA. If you only look at that line, it looks bearish.

As for 2025 - 2026, liquidity projections show a different story. Stimulus isn’t exploding the way it did post-COVID, but the global trend is shifting away from tightening and toward easing.

Interest rates are expected to slowly decline with stronger ETF flows, global adoption, high-net-worth rebalancing, the medium-term macro environment looks nothing like 2022.

⚡ Key Takeaway

• We’re at sentiment rock-bottom, not trend rock-bottom: The macro environment is hitting the same extreme fear levels we only see once every few years, and historically markets don’t stay here for long. This phase usually marks exhaustion, not the beginning of a deeper breakdown.

• Extreme fear rarely lasts more than a month: Bitcoin has already spent weeks in Fear territory, and most cycles show reversals tend to emerge 2 - 3 weeks after sentiment collapses. The macro environment is showing classic bottoming behavior, even if price action still looks messy.

• 2021 proved fear doesn’t kill bull markets: During May - July 2021, the macro environment looked awful and every sentiment chart screamed bearish, yet BTC doubled shortly after. Today’s market signals look uncannily similar, reminding you that fear often precedes strength.

• The 50W SMA breakdown isn’t the death sentence people think it is: This same market signal has both preceded massive rallies (2020, 2021) and deeper corrections (2022). The difference wasn’t the chart pattern; it was the macro environment surrounding it.

• Liquidity is the real deciding factor, not the moving average: In 2020 - 2021, global liquidity was expanding, creating the oxygen markets needed to push higher. In 2022, liquidity was being drained, suffocating momentum. Reading market signals without reading liquidity always leads you astray.

• Today’s liquidity outlook looks closer to 2021 than 2022: As we move into 2025–2026, rate cuts, easing cycles, ETF flows, and global adoption are forming a very different macro environment than the one that killed the last bull market. Structurally, the stage is healthier now than most think.

⚠ This newsletter is for informational purposes only and should not be considered investment advice. Traders should conduct thorough research, understand the risks, and carefully evaluate their decisions before investing in cryptocurrency.

If you’re interested in other topics and want to stay ahead of how Crypto are reshaping the markets, from whale strategies to the next major altcoin narrative, you can explore more of our deep-dive articles here:

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