Yesterday was still in fear, today has already started to be greedy.
On August 20, the cryptocurrency fear and greed index jumped from 46 to 62 overnight, re-entering the greed zone.
Meanwhile, BTC briefly touched $70,000, hitting a new high since early June.
In just one day, the market's sentiment completely changed.
A few days ago, the discussion was: "Can $60,000 hold?"
Today, it has turned into: "Can $70,000 hold?"
The price changed, and the sentiment changed along with it.
However, I feel that what is most worth watching now is not "Is the bull market back?".
But rather a more realistic question: Is this wave of increase due to real funds coming back, or are the shorts too crowded, being forced to buy back?
This year's market has actually been "afraid" for a long time
If you pull up this year's fear and greed index, you'll find an interesting phenomenon:
In 2026, the market has mostly had no sense of security.
At the beginning of the year, the index briefly rose above 60, and everyone was enjoying the optimistic sentiment.
But it quickly reversed.
In February, it dropped to single digits, entering extreme fear.
For the following months, the index lingered mostly between 20—40.
Even though there was a rebound in May, it only approached 50 at its highest and never truly entered greed.
So this year has indeed been very tormenting:
It fell, and no one dared to buy. It rose, and no one dared to chase.
Many funds are not entirely unwilling to buy, but rather have been waiting for a more definitive signal.
The result is that the number of observers has been increasing, and short positions have started to pile up slowly.
And once the price truly breaks through a key level, things can easily change.
Why did BTC suddenly touch $70,000 again?
Many people will simply attribute this round of increase to "good news has arrived".
But if we only look at the news, it doesn't really explain why the price suddenly accelerated.
My understanding is: Good news ignites the fire, and positions accelerate it.
Recently, the market has indeed seen some relatively positive changes.
The yield on U.S. Treasuries has fallen, and the dollar has weakened, giving risk assets a bit of breathing room.
At the same time, there has been a marginal improvement in regulatory expectations regarding cryptocurrency market structure legislation in the U.S.
These things aren't really considered "super positives".
What truly started to accelerate the market, was: Shorts began to cover their positions.
After BTC broke through key resistance, the short positions that were originally pressing down started to be forced to close.
And closing shorts is essentially buying.
Thus, the market easily forms a familiar cycle:
Rise → Shorts cover → Buying increases → Continue rising → More shorts cover.
So in this round of increase, some people are not suddenly bullish.
Instead, it is: They had no choice but to buy.
This is the most interesting aspect of a short squeeze. It doesn’t require everyone to be bullish. It just needs the shorts to start realizing — they were wrong.
But is 62 really "crazy"?
Here I want to remind you:
Don’t see the word "greed" and start FOMOing.
While 62 sounds exciting, in the context of the fear and greed index, it's merely just entering the greed zone.
When emotions are truly crazy, the index often spikes to 75, 80, or even above 90.
This time jumping directly from 46 to 62 feels more like:
The price has risen first, and the sentiment is only catching up now.
Because the index itself is influenced by price momentum, volatility, trading volume, and other factors.
When the market is grinding sideways, the sentiment index can stay low for a long time.
Once BTC suddenly breaks out, sentiment will naturally recover quickly.
So this 62, rather than being a sign of "the market suddenly going wild", is more like: The market is finally not so fearful anymore.
This distinction is very significant.
It currently feels like funds are willing to take on risk again, rather than everyone rushing into the market to grab BTC.
Is this a true bull market or just a short squeeze? Keep an eye on three areas
So now there's no need to rush to guess the top, nor is it necessary to quickly declare a new bull market.
Going forward, I’d prefer to focus on three things.
First, watch ETF capital
If BTC continues to rise while spot ETF capital continues to flow back, that would be quite promising.
Because this means that what drives the market up is not just the short covering but also new spot capital coming in.
Conversely, if the price keeps rising but capital does not follow suit noticeably, then caution is needed:
It may just be positions driving up, not a trend.
Next, watch $70,000
The significance of the $70,000 level is no longer just a round number.
Breaking through is easy, maintaining it is difficult.
A truly strong trend is not just touching $70,000 once during the session, but after a pullback, buyers still emerge around $70,000.
So what I am more focused on next is:
When BTC pulls back, will anyone still be willing to buy?
Lastly, watch the dollar and yields
This round of recovery in risk assets still hinges on liquidity expectations.
If the dollar continues to weaken and yields maintain their decline, it is of course good for BTC.
But if the dollar strengthens again and yields rise, then this wave of emotional recovery could also cool off quickly.
After all: Emotion can turn in a day, but trends don’t change that quickly.
Right now, I won't be in a hurry to call it a bull market
The fear and greed index has jumped from 46 to 62, and BTC has touched $70,000 again.
There’s no doubt that this is a very noticeable emotional recovery since the beginning of the year.
But I won’t directly shout: "The bull market is back!" just because it hit 62.
Similarly, I won’t think the market is unreliable merely because this wave of increase has some short-squeeze components.
It feels more like the market has completed an important switch: From "afraid to take risks" to "willing to re-bet".
This is already a significant change.
But what truly determines whether the market can go far from here isn’t whether BTC can break $71,000 or $72,000 today.
It’s: When the next pullback occurs, will there be anyone there to buy?
So now at $70,000, I prefer to see it as a test.
62 is the moment emotions turned greedy.
70,000 is the true test.
Next, don’t rush to guess whether the price will rise or fall; focus on how capital and the market behave.
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Risk warning: The content is for market observation sharing only and does not constitute investment advice. The cryptocurrency market is highly volatile, please participate within your risk tolerance level.
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