The Crypto Fear & Greed Index, which tracks overall investor mood in digital asset markets, has moved back into “greed” territory for the first time since the $19 billion liquidation event in October that triggered a broad retreat from altcoins. In its Thursday update, the index printed a score of 61, marking a clear improvement after several weeks spent in “fear” and “extreme fear.” Just one day earlier, the index stood at 48, placing sentiment in the neutral range.

Investor confidence deteriorated sharply on Oct. 11 after roughly $19 billion was wiped from crypto markets. In the weeks that followed, sentiment readings sank to some of their lowest levels on record, dipping into the low double digits multiple times throughout November and December. Such sentiment indicators are often watched by traders as a way to assess whether market conditions may be leaning toward buying pressure, selling pressure, or caution.

Bitcoin rally supports improving mood

The recovery in sentiment has unfolded alongside a renewed upswing in Bitcoin’s price. Over the past week, Bitcoin rose from around $89,799 to reach a two-month high of $97,704 on Wednesday, according to CoinGecko data. The previous time Bitcoin traded above $97,000 was on Nov. 14, though sentiment then remained in “extreme fear” as prices were sliding sharply from record highs.

The Crypto Fear & Greed Index aggregates several inputs to produce its score, including price movements of major cryptocurrencies, trading volumes, momentum indicators, Google search trends and overall tone across social media platforms.

Holder behavior sends mixed but notable signals

Despite the price rebound, some onchain data points to Bitcoin holders reducing exposure. Analysts at Santiment noted in a Wednesday post on X that the number of Bitcoin holders declined by 47,244 over the past three days, suggesting that “retail had been dropping out due to FUD & impatience.”

“When non-empty wallets drop, it's a sign that the crowd is dropping out, a good sign. Similarly, less supply on exchanges decreases the risk of a selloff,” they said, adding that “This price bounce has also been supported by a seven-month low 1.18 million Bitcoin on exchanges.”

Lower balances on exchanges are often interpreted as a constructive signal, as they imply more Bitcoin is being held off-platform in private wallets, potentially reducing the likelihood of rapid selling pressure.

Sources:

https://cointelegraph.com/news/crypto-fear-greed-hits-greed-bitcoin-two-month-high

https://x.com/santimentfeed/status/2011493617227960678/photo/1

https://x.com/santimentfeed/status/2011493617227960678

https://alternative.me/crypto/fear-and-greed-index/

https://www.coingecko.com/en/coins/bitcoin