Bitcoin Rally Hits Extreme Greed: Is the Market Overheated or Just Getting Started?

Bitcoin rally started in late August, climbing approximately 24% since 17 August, briefly meeting the $81,000 mark, its highest level since May, on the back of a bounceback from an early-August drop below $63,000. Short covering, a weak US dollar, and an improving liquidity outlook were other factors seen as supportive of Bitcoin.

Bitcoin Hits Extreme Greed: Why Sentiment Flipped So Fast

Bitcoin Surges Back Above $80K After a 24% Weekly Rally

The return of Bitcoin $80K scenario coincided with renewed institutional demand. U.S. spot Bitcoin ETFs saw $1.9 billion worth of net inflows in the week ending August 21, 2026, the most in a week this year, providing spot buying demand alongside the derivatives rally.

Fear & Greed Index Jumps From Fear to Extreme Greed

Sentiment reversed almost as quickly as price. One widely followed measure rose from 36 a month earlier to 81, entering “Extreme Greed,” after spending much of the preceding period in far more defensive territory. That makes Bitcoin Fear and Greed Index today a striking reflection of how rapidly traders have repriced risk.  

However, the shift into Bitcoin Extreme Greed did not last, and more cautious measures of sentiment showed the risk on trade had reached a local top before a sharp reversal in risk sentiment.