Crypto Fear & Greed Index rises to 61, Bitcoin rebound drives market sentiment towards greed

BTC-0,58%

On January 15, news, the cryptocurrency market has shown a clear rebound in investor sentiment after nearly three months of downturn. Data indicates that since October last year, the Cryptocurrency Fear and Greed Index has entered the “Greed” zone for the first time, reflecting a recovery in market risk appetite.

According to data released by Alternative.me, the Cryptocurrency Fear and Greed Index rose to 61 on Thursday. In the previous weeks, this indicator had been hovering in the “Fear” and “Extreme Fear” zones, and just the day before, the index remained at a neutral level of 48. This change indicates a significant short-term reversal in market sentiment.

Looking back at previous market conditions, a large liquidation event on October 11 became a key turning point for sentiment weakening. On that day, approximately $19 billion worth of crypto assets were liquidated, with altcoins suffering heavy losses, and a rapid spread of risk-averse sentiment. In the following weeks, the index fell into double digits multiple times in November and December, showing traders’ high alertness to market volatility.

Recent sentiment improvement is closely related to the rebound in Bitcoin prices. Market data shows that over the past seven days, Bitcoin’s price has steadily risen from around $89,800 to nearly $97,700, reaching a new high for the period. The strength of Bitcoin has somewhat alleviated previous pessimistic expectations and provided emotional support for the overall cryptocurrency market.

It is important to note that the Fear and Greed Index is more of a sentiment reference indicator rather than a direct trading signal. Historically, extreme fear often appears near market bottoms, while persistent greed at high levels may coincide with market tops. Currently, a reading of 61 indicates a risk appetite recovery but has not yet reached an obviously overheated level.

In the current context, the rapid shift in market sentiment highlights the high sensitivity of crypto asset prices to changes in expectations. Bitcoin has essentially recovered the losses from its sharp decline in October last year. Whether the price can stabilize at high levels will continue to be a core focus for traders and investors.

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