Cryptocurrency investment sentiment shifts: from panic to greed in just one week

The cryptocurrency market has recently experienced an emotional turning point. After months of downturn and caution, investors’ risk appetite has reignited. According to data released by the market sentiment monitoring platform Alternative.me, the Fear and Greed Index has jumped from a neutral zone to the greed territory within just one week, marking the strongest surge since last fall. This shift reflects investors’ renewed confidence in the cryptocurrency market.

Market Sentiment Index Rapid Reversal

According to the Alternative.me Fear and Greed Index, the market sentiment indicator recently rose to 61 points (out of 100), officially entering the greed zone. The previous trading day, the index was still at a neutral level of 48 points, with a single-day increase of 13 points, an astonishing fluctuation. Behind this dramatic volatility reflects the rapid change in the overall sentiment of cryptocurrency investors.

In the past few weeks, the index remained below 40 for a long time, even touching single and double-digit extreme fear zones. During that period, investors generally adopted a risk-averse mode, market trading volume was sluggish, and various currencies collectively came under pressure.

Bitcoin Trend Drives Investor Sentiment Shift

The turning point in market sentiment is almost perfectly synchronized with Bitcoin’s price trend. According to the latest data, Bitcoin’s current price is $90.09K, down 6.60% over the past 7 days. Looking back at the performance over the past week, Bitcoin rebounded from a low of $89,800 to above $97,700, creating a phased high point in nearly two months.

This rebound successfully stabilized market expectations. As Bitcoin achieved an almost $8,000 increase in the short term, investors began to adjust their previous pessimistic outlooks and re-evaluate the long-term prospects of the crypto market. As the “bellwether” of the entire ecosystem, Bitcoin’s strong performance directly translated into rising investor sentiment.

Historical Lesson: Beware of the Trap of Extreme Greed

It is particularly important to note that the Fear and Greed Index is a sentiment reference tool, not a trading signal. Historical data shows that “extreme fear” usually appears at critical market bottoms; conversely, periods of sustained “extreme greed” (index over 80) often indicate that the market is approaching a top.

Currently, the index is at 61 points, indicating that investors’ risk appetite has significantly increased, but it has not yet reached the “extreme euphoria” state commonly seen in bull markets. This position lies between rational greed and excessive optimism, requiring investors to remain vigilant. Many speculators tend to chase high when the sentiment index rises rapidly, only to be trapped near the market top.

Key Levels Recovered, Market Observes Calmly

As Bitcoin successfully recovers near the key levels before the sharp decline in October last year, global traders are closely watching the subsequent trend. The current concern is whether this greed phase can be sustained to consolidate the momentum and push Bitcoin to challenge the psychological milestone of $100,000 again.

Investors should note that the volatility in the cryptocurrency market remains high, and the rapid rise in the sentiment index should be approached with caution. Within the current moderate greed zone at 61 points, rationality and risk control remain crucial factors for successful investing.