Panic and Greed Index rebounds 22 points in 3 days: market sentiment shifts from extreme fear to neutrality

According to the latest news, the cryptocurrency Fear & Greed Index has rebounded rapidly over the past 3 days, jumping from 29 on January 11th to 48 today, an increase of over 65%. This swift shift reflects that market sentiment is gradually recovering from extreme fear and entering a relatively neutral phase.

Rapid Reversal of Market Sentiment

From the data, market sentiment continued to worsen between January 11 and 13, with the index dropping from 29 to 26, approaching the extreme fear boundary. However, from the 13th to the 14th, a clear reversal occurred, with the index rising 22 points in one day, which is a significant turnaround.

Significance Behind the Sentiment Reversal

Transition from Fear to Neutral

The Crypto Fear & Greed Index is an important reference for measuring market sentiment, ranging from 0 (extreme fear) to 100 (extreme greed). An index in the neutral zone (40-60) indicates that market participants’ psychological expectations are relatively stable, neither overly pessimistic nor overly optimistic.

This shift may reflect several changes: market participants easing their panic over recent declines, possibly due to price stabilization or rebounds; or the market beginning to digest previous negative factors, with confidence gradually restoring.

Sustainability of the Rebound

Based on the single-day increase of 22 points, this is a fairly rapid change. However, it’s important to note that moving from fear to neutral only represents partial recovery of market sentiment. The index still remains well below the greed zone above 60, indicating that market participants’ optimism has not fully been restored.

Future Focus Points

The key to watch is the stability of this neutral state. If the index can stabilize within the 40-60 range and gradually move upward, it suggests healthy market sentiment recovery. Conversely, if it dips back into fear territory, it may signal new market pressures.

Changes in the index often lead price movements, so market participants can use it as a sentiment reference, but should not rely solely on a single indicator for decision-making.

Summary

The Fear & Greed Index quickly rebounded from 26 to 48, marking a significant shift from extreme fear to neutrality over the past 3 days. This transition indicates that the market is digesting previous negative factors and participants’ expectations are stabilizing. However, the index remains at a moderate level, and it remains to be seen whether it can further recover into the greed zone and whether this stability can be maintained. For investors, this is a sign of improving market sentiment, but it should be combined with price trends and fundamental analysis for comprehensive judgment.