In brief:
₿- U.S. spot Bitcoin ETFs recorded roughly $1.9 billion in weekly inflows, while short liquidations added further buying pressure to the Bitcoin rally.
₿- Bitcoin’s rise above $80,000 triggered billions in leveraged short liquidations, accelerating the crypto market’s recovery and strengthening bullish momentum.
The cryptocurrency market has shifted sharply toward bullish sentiment, with CoinMarketCap’s Fear and Greed Index reaching 81 and entering the “extreme greed” category for the first time since late 2024. The rapid change follows a powerful Bitcoin rally that pushed the leading cryptocurrency above $80,000 and lifted the total crypto market capitalization.
Bitcoin rally drives crypto sentiment higher
CoinMarketCap’s sentiment index climbed from 41 to 81 in just one week and has risen 45 points over the past month. The move marks a significant reversal from the extreme caution seen earlier in 2026, when the index dropped to just 5 in February.
Bitcoin has been the main catalyst behind the latest improvement in crypto market sentiment. The cryptocurrency gained approximately 24% over seven days, briefly reaching around $81,255 before retreating toward the $79,000 area.
The broader cryptocurrency market also expanded rapidly, with total market capitalization reaching approximately $2.67 trillion. Bitcoin continued to dominate the sector, accounting for nearly 60% of the total crypto market value.
Short squeeze and ETF inflows fuel Bitcoin’s price
Bitcoin’s breakout above $70,000 triggered substantial liquidations among leveraged short positions. More than $2.7 billion in bearish crypto positions were reportedly liquidated over 24 hours, creating additional buying pressure as traders were forced to close their positions.
Institutional demand also strengthened during the rally. U.S. spot Bitcoin ETFs recorded approximately $517 million in net inflows on Aug. 19, followed by another $606 million the next day. Across the five trading sessions ending Aug. 21, Bitcoin ETFs attracted roughly $1.9 billion in net inflows.
Spot Ether ETFs, XRP, and Solana investment products also recorded inflows, highlighting broader demand across major digital assets.
Extreme greed raises overheating concerns
CoinMarketCap’s reading of 81 puts the market firmly in its extreme greed category, which begins at 80. The index combines price momentum, volatility, derivatives activity, market composition, and crypto-related social engagement rather than relying solely on Bitcoin’s price.
However, the latest reading does not necessarily confirm that the cryptocurrency bull market will continue uninterrupted. Extreme greed can reflect strong investor confidence while also suggesting that market conditions may be becoming overheated.
Alternative.me’s Fear and Greed Index offered a more moderate assessment, remaining in the greed category rather than moving into extreme greed. Its methodology focuses primarily on Bitcoin and incorporates factors including volatility, market momentum, trading volume, dominance, and search trends.
The difference between the two indicators highlights the importance of methodology when assessing crypto market sentiment. Nevertheless, both gauges point to a sharp improvement in investor confidence following Bitcoin’s recovery from its 2026 lows.
Disclaimer: The content of this article is for informational purposes only and does not constitute financial, investment, or trading advice. Readers should conduct their own research and consult a qualified cryptocurrency advisor before making any investment decisions.
Stay informed,
Rodcas Consulting Group