- Crypto Fear & Greed Index returns to “Greed” for the first time since the $19 billion October liquidation.
- Bitcoin climbed to a two‑month high above $97K, helping lift overall sentiment across the cryptocurrency market.
- On‑chain data shows retail holders exiting the market, while falling exchange balances point to reduced selling pressure.
The Crypto Fear & Greed Index has moved back into the “Greed” zone for the first time since the $19 billion liquidation in October that shocked digital asset markets, signalling improving investor sentiment as Bitcoin staged a strong recovery.
In a Thursday update, the index registered a score of 61, reflecting rising optimism after several weeks spent in “Fear” and “Extreme Fear.”
Just a day earlier the index read 48, placing it in the “Neutral” range.
This shift marks a noticeable change in sentiment after months of heightened risk aversion among crypto traders.
Sentiment recovers after October liquidation shock
Crypto investor sentiment plunged on October 11 when roughly $19 billion in positions were liquidated, prompting traders to abandon many altcoins and triggering widespread pessimism.
In the weeks that followed, the Crypto Fear & Greed Index recorded some of its lowest readings on record, dipping into the low double digits several times in November and December.
The index is closely watched as a market sentiment barometer, helping traders decide whether conditions favour buying, selling, or standing aside.
It aggregates data from multiple indicators, including price volatility of major cryptocurrencies, trading volume, market momentum, Google search trends, and overall social media sentiment.
The return to “Greed” suggests the acute caution seen at the end of last year is easing, although markets remain substantially below levels that previously sparked euphoria.
Bitcoin rally lifts broader market sentiment
The improvement in sentiment coincided with a robust rebound in Bitcoin’s price.
Over the past seven days, Bitcoin rose from $89,799 to a two‑month high of $97,704 on Wednesday, according to CoinGecko data.
This move marked the first time Bitcoin traded above $97,000 since November 14.
At the time of writing, Bitcoin was trading around $96,218, up roughly 1% in the prior 24 hours.
During the earlier sell‑off, the Fear & Greed Index had remained firmly in “Extreme Fear” as Bitcoin tumbled from record highs.
The recent advance has helped stabilize broader market confidence, though traders remain cautious about whether the rally is sustainable.
While the index’s return to “Greed” reflects growing optimism, it still sits well below levels typically associated with excessive risk taking.
On‑chain signals show retail traders exiting
Despite healthier price dynamics, some on‑chain indicators suggest retail participation has declined in recent days. Analysts at market intelligence platform Santiment posted on X that Bitcoin holders are reducing exposure.
Santiment reports a net drop of 47,244 Bitcoin holders over the past three days, indicating that “retail traders exited amid FUD and impatience.”
“When non‑empty wallets decline, it’s a sign the crowd is stepping out of the game — a constructive signal. Likewise, lower exchange supply reduces the risk of a sell‑off,” the analysts noted.
They added that “this price jump is also supported by a seven‑month low of 1.18 million Bitcoin held on exchanges.”
A falling Bitcoin balance on exchanges is typically viewed as a bullish indicator because it suggests investors are withdrawing funds to private wallets and are less likely to dump positions quickly.
Taken together, the mood recovery, Bitcoin’s price gains, and declining exchange balances point to a cautious improvement in the crypto market outlook, even as investors continue to weigh lingering risks.