Cryptocurrency investors' rollercoaster: the March turning point from panic to greed

Market sentiment is experiencing a dramatic reversal. After a three-month period of conservative waiting, investors’ psychological state has finally freed itself from deep-seated fear and regained optimism for the future market. This turning point marks the first significant warming of bullish sentiment since last autumn.

October Liquidation Storm Sparks Market Sentiment Crisis

The “Liquidation Massacre” that erupted in mid-October last year became a critical point where investor mentality collapsed. On that day, the derivatives market experienced a $19 billion surge in liquidations, instantly destroying the market confidence foundation. Altcoins subsequently plummeted collectively, prompting investors to enter self-protection mode, with large amounts of capital withdrawing from spot markets and shifting to safe-haven assets.

In the following November and December, the market remained in a prolonged state of extreme panic. According to the sentiment monitoring platform Alternative.me’s “Fear and Greed Index,” the indicator repeatedly touched single-digit levels, reflecting widespread investor pessimism at the time. The entire market seemed to fall into hibernation, with trading activity significantly declining.

Signals of a Sharp Reversal in Sentiment Indicators

The turning point appeared recently. According to data from Alternative.me, the Fear and Greed Index rapidly climbed to “61 points” (out of 100) within just a few days, officially entering the “Greed” zone. This indicates that investors’ risk appetite has markedly expanded, and market confidence is gradually recovering.

Notably, the speed of this reversal is remarkable—the index was still at a neutral level of “48 points” the previous day, and the next day it surged to 61 points. This intense shift in sentiment vividly reflects investors’ quick transition from pessimism to optimism.

Bitcoin’s Recent Volatility and Investor Sentiment Resonance

Bitcoin’s price movement has almost perfectly synchronized with the market sentiment shift. In just a few days, Bitcoin broke through $89,800 and once challenged the key level of $97,704, creating a short-term new high. Current data shows Bitcoin fluctuating around $90.20K, slightly retraced from earlier levels but still successfully stabilizing overall market expectations.

This upward trend has successfully rekindled market confidence. After a quiet March, trading activity has noticeably increased, institutional funds are gradually flowing back, and the market is regaining vitality.

Caution: Hidden Risks Behind Extreme Greed

It must be pointed out that the Fear and Greed Index is only a psychological reference tool and not a buy or sell signal. Historically, “Extreme Fear” often signals that the market is near the bottom; whereas prolonged “Extreme Greed” usually indicates that the market is approaching a high point.

Currently, the index level of 61 suggests an increased risk appetite, but it is still far from the “Extreme Euphoria” state often seen at the peak of a bull market (index over 80). This instead indicates that the current market sentiment is warming up in a relatively rational phase, not blind optimism.

As Bitcoin successfully reclaims key psychological levels from before October, traders worldwide are watching the subsequent trend quietly. Whether this “Greed” rally driven by emotional recovery can stabilize and further push the market higher will become the next market focus. Investors should remain vigilant, seeking a balance between optimism and caution.