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Bitcoin has managed to stage a notable relief rally in recent days, with its price approaching the $73,000 mark.
However, market psychology is refusing to follow the price action.
The Bitcoin Fear and Greed Index, which shows whether traders remain fearful or greedy, broader sentiment remains paralyzed at a score of 22.
For now, the cryptocurrency market remains entrenched in the "extreme greed" territory.
There are some concerns about this relief rally being just a flash in the pan.
As noted by former BitMex CEO Arthur Hayes, Bitcoin remains highly correlated with software and technology stocks. If the U.S. equities market stalls or reverses, Bitcoin's current recovery could quickly be exposed as a fleeting "dead cat bounce."
The leading cryptocurrency is still down a punishing 42.6% from the record high it established roughly five months ago, CoinGecko data shows.
A sentiment rollercoaster
In early to mid-December 2025, market sentiment was already deeply depressed, with the index oscillating in the 20s before plunging close to a score of 10 around Dec. 16.
However, the start of the new year brought a temporary wave of optimism.
Throughout early January, the index embarked on a steep upward trajectory, peaking at a score of 61.
Following the January peak, the index suffered a precipitous collapse. By the final week of January, sentiment had crashed back down into the 20s, entirely erasing the new year's optimism.
The psychological damage compounded throughout February, which proved to be a historically bleak month for crypto sentiment.
During February, the index absolutely cratered. It has spent weeks scraping the absolute bottom of the chart.
The metric repeatedly registered single-digit scores. By the final week of the month, it plunged to as low as roughly 5.
It is only in the very early days of March that the index has shown any signs of life. Yet, as the data shows, it takes much more than a few days of positive price action to heal months of psychological whiplash.