Bitcoin Breakout Sparks Bullish Continuation Bets Amid Extreme Greed

The Bitcoin Fear & Greed index has reached its highest reading since July 2025, but this may not necessarily be a warning sign for a market downturn. The author believes that BTC's recent breakout on a 6% gain is strong evidence of a bullish continuation, despite the asset being overbought and extended from its Fast line.

The author has set a profit-taking limit of no more than another 10% from their longs, but still expects a sudden pullback in the near future. The Slow line around $70,491 is identified as the worst-case scenario, with a roughly -17% drop possible. However, each day that BTC stays strong bullish above its Cloud helps to curl the Slow line upward, supporting the broader bullish trend.

Separately, Ethereum (ETH) has reached a short-term rejection zone after printing its third daily TBO Breakout on Monday and barely reaching the 1.272 Fibonacci Extension at 2,818. The author regards this extension as weaker due to being short-term but still valid. ETH/BTC also printed a TBT Bearish Divergence, warning that BTC is winning in the short term.

The dollar remains strong, with the U.S. Dollar Index (DXY) above its Cloud and RSI overbought for four confirmed days. The author still expects a drop rather than bullish continuation, but this expectation has not yet materialized into a reversal.