3-Day Reversal from 26 to 61: Why Has Cryptocurrency Market Sentiment Suddenly Turned Greedy

The sentiment in the crypto market has experienced intense fluctuations over the past 3 days. The Fear and Greed Index jumped from 26 (fear) on January 13 to 61 (greed) on January 15, an increase of over 130%. Behind this shift are a rebound in BTC prices, significant capital inflows, and a rapid recovery of market sentiment.

Rapid rebound of the sentiment index

From the data, the market has moved out of extreme fear and into greed within just 3 days. This rapid change reflects confirmation of a market bottom and quick capital re-entry.

Core factors supporting the shift in sentiment

The Fear Index includes 6 dimensions, with several showing significant improvement during this rebound:

• Volatility (25% weight): BTC rebounded from lows, price volatility decreased, risk sentiment eased
• Market trading volume (25% weight): Large capital inflows, trading activity increased
• Social media buzz (15% weight): Increased discussion, sentiment turning optimistic
• Market surveys (15% weight): Investor confidence recovered
• Bitcoin dominance (10% weight): BTC market cap share remained high at 59.16%
• Google trending keywords (10% weight): Search interest increased

Price and capital dual drivers

BTC Price Performance

BTC is currently priced at $96,928.63, with notable recent gains:

• 24-hour increase: 1.71%
• 7-day increase: 6.19%
• 30-day increase: 12.71%

This price rebound is a key support for the rising fear index. The transition from 26 to 61 was accompanied by continuous BTC price growth, directly improving market sentiment.

Significant institutional capital inflows

According to the latest news, Bitcoin ETFs saw the largest capital inflow in 3 months on January 14, totaling $753.7 million. Notably:

• Fidelity FBTC led with $351 million
• Bitwise BITB: $159 million
• BlackRock IBIT: $12 million

The influx of institutional funds not only pushed BTC prices higher but also strengthened market optimism. This is a key driver behind the shift from fear to greed.

Issues to watch in greed territory

When the index enters the greed zone, the market is often at a relatively high level. The jump from an average of 28 last week to 61 now indicates a rapid recovery from extreme fear to high optimism. While this shift confirms a market bottom, several risks should be considered:

• Overly rapid rebound: Doubling the sentiment index in 3 days may indicate excessive optimism
• Sustainability concerns: Can the index stay in greed, or will it revert to neutral or fear?
• Fundamental support: Are the price and capital inflows driven by fundamentals or short-term sentiment?

Summary

The crypto market completed a full sentiment shift from extreme fear on January 13 to greed on January 15 within 3 days. This was driven by BTC price rebound, large institutional capital inflows, and market risk sentiment recovery. The rise of the fear index from 26 to 61 indicates a turning point at the bottom.

However, the comparison between last week’s average of 28 and the current 61 shows that market sentiment has quickly shifted from fear to greed. The sustainability of this change warrants attention. Future observations should focus on whether the index can stabilize in the greed zone, whether price rebounds can be sustained by capital support, and whether new risks may disrupt the current optimistic mood.