The Crypto Fear & Greed Index has entered “greed” territory for the first time since October’s $19 billion liquidation event. The index reached 61 on Thursday as sentiment improved alongside a steady Bitcoin rally. The reading followed weeks of fear and extreme fear after the October 11 liquidation wiped billions from crypto markets. Just one day earlier, the index stood at 48, which placed sentiment in neutral territory.
Bitcoin’s price recovery played a central role in this shift. Over the past seven days, Bitcoin climbed from $89,799 to $97,704, according to CoinGecko.
The Crypto Fear and Greed Index tracks investor emotions using volatility, momentum, social trends, and market dominance. Traders often use it to assess whether markets favor buying, selling, or waiting. Fear often appears near market lows, while greed tends to emerge during recovery phases. This pattern suggests confidence rebuilds gradually rather than through sudden reversals.
Does the return of greed signal renewed confidence or simply early-stage recovery after prolonged uncertainty?
Greed does not always point to overheated markets. Early readings often reflect easing selling pressure as traders regain trust after extreme volatility fades.
A number of elements drove the sentiment up. The stability of the Bitcoin price has reduced volatility, thereby restoring traders' confidence in short-term positions. Additionally, derivatives exchanges reflected better liquidity. Funding rates returned to normal levels, which, in turn, reduced forced liquidations, allowing traders to focus on their strategies.
Long-term Bitcoin holders also reduced selling activity. On-chain data showed stronger holding behavior, a pattern that often aligns with steadier price action.
The last time Bitcoin traded above $97,000 was November 14. At that point, the sentiment index still showed extreme fear as prices fell from record highs.
Analysts at Santiment reported a net drop of 47,244 Bitcoin holders over three days. They said retail investors exited positions due to fear, uncertainty, and impatience. Santiment noted that fewer non-empty wallets often signal crowd capitulation. This trend can reduce selling pressure as weaker hands exit the market.
Exchange balances also fell to a seven-month low of 1.18 million Bitcoin. Lower exchange supply often signals reduced risk of sudden sell-offs. Generally, when Bitcoin moves off exchanges, traders appear less willing to sell quickly. This behavior can support improving sentiment during recovery phases.
Sentiment alone does not predict prices. Instead, it provides context around trader behavior and expectations. Market participants continue to watch volume trends and funding rates. Healthy sentiment usually aligns with rising spot demand rather than excessive leverage.
Even so, macro conditions still prevail in the crypto markets. Expectations regarding interest rates and the amount of money in the world remain major factors in determining how much risk people are willing to take with digital assets.
The Crypto Fear and Greed Index remains one of the many tools available. It is common for traders to use it in combination with technical analysis and on-chain data to make well-rounded decisions.
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The Crypto Fear and Greed Index has returned to greed as Bitcoin prices recover and market stability improves. Reduced volatility, lower exchange supply, and steadier derivatives conditions have supported sentiment. Traders should track volume, funding rates, and on-chain data to confirm whether this confidence shift remains sustainable.