Cryptocurrency Market Sentiment Shifts: Fear & Greed Index Climbs Out of Extreme Fear Territory

LiquidityWizard · 2026-01-12T07:03:48+00:00

The Crypto Fear and Greed Index has risen from 20 to 28, indicating a shift from "Extreme Fear" to "Fear" in market sentiment. While confidence is improving, investor opinions remain divided, showing both bullish and bearish sentiments as of early 2026.

LiquidityWizard

2026-01-12 07:03:48

Abstract generation in progress

According to Alternative data from January 2nd, the Crypto Fear and Greed Index has reached 28, exiting the “Extreme Fear” zone that marked yesterday’s reading of 20. The index is now firmly in “Fear” territory, signaling a notable shift in overall market psychology.

Understanding the Index Components

The Fear and Greed Index operates on a 0-100 scale, combining multiple market indicators to gauge investor sentiment:

Volatility (25%): Measures price fluctuation intensity
Market Volume (25%): Reflects trading activity levels
Social Media Hype (15%): Tracks sentiment across social platforms
Market Surveys (15%): Captures investor opinion polls
Bitcoin Dominance (10%): Shows BTC’s market share relative to altcoins
Google Trends Analysis (10%): Analyzes search interest patterns

Market Context and Sentiment Reading

The movement from index level 20 to 28 represents a meaningful recovery in market confidence, though conditions remain cautious. Current data shows Bitcoin’s market sentiment sits at 53.27% bullish against 46.73% bearish, suggesting that despite exiting extreme fear, investors remain divided in their outlook.

This transition reflects cautious optimism as markets navigate early 2026, with participants gradually rebuilding risk appetite from the depths of previous downturns.

BTC3,32%

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.