Bitcoin Hits Extreme Greed for First Time in 616 Days as Warning Signs Pile Up—10% Correction Looms

Warning signs are piling up for Bitcoin bulls as the crypto fear and greed index surges to 81, marking 'extreme greed' for the first time since December 17, 2024—a span of 616 days—and setting the stage for a potential 10% correction. The metric, which has outpaced underlying data with volatile mood swings, historically has flashed this exact signal just before sharp pullbacks, even as Bitcoin price has jumped more than 22% over the last 7 days.

From a February low of 5 to Sunday’s 81

The number reflects how quickly the mood swung. A month ago, the same gauge read 36, and a week ago it was 41, both fear-based. Sunday, it printed 81 and has held there since, a 45-point jump in three decades that CoinMarketCap called the fastest sentiment shift of the year from one extreme to another.

Going back further highlights the contrast in the arc. The index bottomed at 5 on February 5, its lowest point of 2026 and about as far as it gets in capitulation for the gauge. Going from there to Sunday’s 81 is a full journey from panic selling to greed in six months.

Not all trackers say the same label. Alternative.me, which has been measuring crypto for longer, still places the mood in “greed” rather than “extreme greed” (about 6% less than the 81 mark). But both are up in the same direction on the gauge.

A surprise from the Treasury, not an ETF headline, sparked the jump

The flip in sentiment followed a Bitcoin run that started with a policy decision few in crypto trading circles had heard of. On Wednesday, Treasury Secretary Scott Bessent doubled the size of the department’s long-duration bond buybacks, lifting each of the larger operations to $2 billion to at least $4 billion. He told CNBC the next day that the eventual total could be increased further.

The catch is that none of that cash has been moved. They are part of a larger program that doesn’t start until September 9 and runs through November 4. What shifted was tone, not plumbing. Long-bond yields, which had moved toward a near two-decade high on weak 30-year demand, fell sharply in just minutes as traders picked up on the message about the likelihood of support for the market.

Crypto didn’t give back this gain as the yields drifted higher on Thursday. Traders who had shorted Bitcoin – betting on tighter conditions to come – were caught off guard by their long exposure. About $3 billion in short positions were liquidated the following day, pushing the market price higher with every forced buy.

Bitcoin’s 24% week left the rest of the market behind

Bitcoin jumped roughly 24% in a week, its best weekly jump since 2024, and the entire market didn’t keep up, giving more of its share to Bitcoin. CryptoQuant, in a report, stated that the rally has flipped its indicators, with the firm’s Bull Score jumping to 80 from 30 in a week, the highest it’s seen since October 2025, and with eight of 10 underlying signals now in the bullish camp.

CryptoQuant said the market has kicked off the early stages of a new bull market but refrained from declaring it. A weekly close above the Bitcoin 365-day moving average, currently around $83,000, is the line the firm wants to see. LMAX Group strategist Joel Kruger pointed to the May 2026 high of $82,820 as the threshold that, if breached, would confirm to some that a cycle low had taken place and the road was open toward $100,000.

Why the froth is raising skeptics’ flags

The same quick rise excites both bulls and bears. Funding rates, the fee that leveraged traders pay for holding long positions, hit a 20-month peak this week, and it’s been a sign of most of Bitcoin’s sharper pullback periods over the last two years because it indicates the rally is leaning on borrowed money.

Whales have already started to sell into strength. CryptoQuant reported short-term holder whales realized about $1.2 billion in profits between August 20 and 22, including a record $614 million on August 20. Exchange inflows jumped to roughly 53,000 BTC, the most since June, and there are more coins sitting in the right place to get rid of them. The traders’ unrealized profit margins hit 20.5%, and CryptoQuant noted that Bitcoin fell about 30% the last time that metric hit 19%, back in early May.

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