Bitcoin Surges into 'Extreme Greed' Zone Amid Treasury Policy Boost
Bitcoin's price surge has pushed the cryptocurrency market into an 'extreme greed' zone for the first time in 616 days. According to blockchain media outlet Cryptopolitan, the crypto fear and greed index stood at 81 on August 25, marking a sharp reversal from the year's low of 5 on February 5.
The market sentiment shifted rapidly, jumping from 36 a month ago and 41 a week ago to 81 this week. CoinMarketCap noted that this was the fastest shift in sentiment this year from one extreme to the other.
The U.S. Treasury policy to expand purchases of long-term bonds is cited as the starting point of the rebound, but not the usual ETF catalyst. The programme, scheduled to run from September 9 to November 4, has already shown a positive impact on the market, with Bitcoin giving up little of its gains even as rates resumed rising on August 21.
Traders who had shorted bitcoin in anticipation of tighter financial conditions were forced the other way, and about $3 billion in short positions were liquidated the next day. This led to a surge in prices, with Bitcoin's strength coming with a rise in market dominance.
CryptoQuant reported that bullish indicators turned quickly, with its bull score jumping to 80 from 30 in a week, the highest level since October 2025. However, the rise has been too fast, and funding rates rose to the highest level in 20 months this week, indicating that the rise is relying more on borrowed money than cash.