The crypto market is experiencing a powerful shift in sentiment: the fear and greed index jumped to 74 points on August 25, marking the highest value in the last ten months. The last time such a level was recorded was on October 5, 2025, and the very next day Bitcoin updated its all-time high, surpassing the $126,000 mark. Today we are seeing similar dynamics, although the index has already managed to correct to 65 points.
This surge marks the end of one of the longest streaks of pessimism in the metric's eight-year history. The index, which has been published daily since February 2018 and reflects market sentiment on a scale from 0 (extreme fear) to 100 (maximum greed), has finally exited the "red zone."
Third-Longest Decline
For 106 days, up until August 19, the index never rose above 50 points. This is the third-longest such streak in history. It remained below the neutral mark for longer only during the bear market of 2022 and in the period from January of this year, when a streak of 107 days was recorded.
However, the real depth of the decline turned out to be even more impressive. Since January 18, the index has been below 50 for 213 out of 214 days. The only day it managed to return to a neutral value was May 5. The average index value for 2026 is just 24.2 points, with a minimum of 5 points recorded on February 12. Notably, since January 15, the mark has never exceeded 60.
Forced Selling and Reversal
The key catalyst for the reversal was Washington's policy: on August 19, the U.S. Treasury doubled its buyback volume of long-term bonds, increasing each operation to at least $4 billion. This decision caught bears off guard. Already on August 20, the total liquidations of short positions reached $2.74 billion, forcibly closing the positions of 172,202 traders.
Pressure on short sellers continued the next day: losses on short positions grew by another $1.06 billion, while long liquidations amounted to only $174.41 million. Bitcoin responded with a 23% rise over the past week. As of August 26, the BTC price is holding near the $78,880 mark, which is still 37% below its all-time high.
Nevertheless, demand indicators do not yet confirm a shift in sentiment. Exchange-traded funds remain in the red since the start of 2026, having reduced holdings by approximately 92,000 BTC. The Coinbase premium for Bitcoin and Ethereum also remains negative, although both metrics improved in August but have not yet turned positive.
My analysis: The sharp jump in the index is a classic signal that the market has moved from the capitulation phase to the recovery phase, but the sustainability of this move will depend on confirmation from institutional demand. The lack of ETF inflows and the negative Coinbase premium suggest that the current rally is speculative in nature and may be vulnerable to a correction. Keep an eye on these metrics—they will be decisive in determining the long-term trend.