Bitcoin Investor Sentiment Shifts From Extreme Greed To Neutrality

In just a few days, the euphoria evaporated from the crypto market, giving way to cold caution. While bitcoin fell after a peak of around $112,000, the Crypto Fear and Greed Index sharply shifted from “extreme greed” to neutrality. Set at 50, this score marks a clear psychological turning point among investors. This double inflection, between technical pullback and emotional disenchantment, reflects a major strategic turning point in the market’s dynamics.

The Drop of the Sentiment Indicator: A Sharp and Quantified Shift

Between May 24 and 31, bitcoin experienced a slight pullback causing panic in the markets, but it was the abrupt reversal of market sentiment that truly caught observers’ attention.

The Crypto Fear and Greed Index (CFGI), a key psychological barometer for crypto investors, underwent a rapid and marked shift, revealing a sudden loss of confidence or, at the very least, a suspension of euphoria.

Here are the important elements of this shift:

• The price of bitcoin dropped from $109,000 to around $104,500 over the course of a week, recording a 4.13% decline against the US dollar;
• This movement caused the CFGI indicator to fall from 60 (greed) on May 30 to 50 on May 31;
• The CFGI settled precisely at 50, in the heart of the neutral zone, after oscillating between “greed” and “extreme greed” in the preceding days;
• This neutrality comes after bitcoin reached a historic record on May 22: between $111,814 and $111,970, with some platforms briefly showing $112,000;
• At that time, the sentiment index flirted with extreme greed, as was the case in November 2024 when the CFGI peaked at 94 out of 100, with BTC at $98,997.

The score of 50 constitutes a pivotal zone: neither optimism nor panic. This reading “is just one point above fear, and one point below greed”, illustrating the current emotional fragility.

Contrary to what one might think, it is not the price drop that scares here, but the abruptness of the perception change, revealing a market losing its short-term bearings.

The Consolidation or the Exhaustion of the Bitcoin Market

Beyond immediate numbers, it is the interpretation of this neutrality that intrigues analysts. The return of the CFGI to 50 does not mark the end of a frenzy, but the beginning of a suspended moment, a sort of parenthesis in the emotional cycle of the market.

This median reading, at 50, coincides with bitcoin at around $104,500, a 5.56% increase compared to its November 2024 valuation. This data is key: bitcoin remains, despite everything, well above its previous levels of high sentiment, which might indicate a consolidation phase rather than a deep reversal.

This zone of neutrality occurs in a context of “a new form of price discovery”. It is no longer euphoria driving decisions, but a form of temporary disorientation, typical of transition periods.

The absence of clear direction, after a historic peak, reveals tension between those anticipating a continued bullish move and those fearing a more pronounced correction. The fact that the market remains stable, despite this sentiment pullback, also highlights a certain maturity among investors, now more sensitive to cycles than emotional peaks.

While the CFGI reflects deep indecision, the market seems to be preparing for a new chapter, although its direction cannot yet be determined. This relative calm could lead either to a bullish recovery supported by strong fundamentals and investor appetite, or a more sustained pullback if investor confidence continues to erode. For now, bitcoin remains in a precarious balance: stable but vulnerable. In the very short term, technical signals and trading volumes will be decisive in determining whether this neutrality marks a pause… or the start of a deeper trend change.