Crypto market sentiment and price momentum diverge, raising risks of a correction.

Huoxing Finance reports that on September 2, CryptoQuant analyst Axel Adler Jr. stated that the Bitcoin sentiment index, after peaking on August 24, has continued to cool but remains in the “extreme greed” zone. Meanwhile, Bitcoin’s current price has not risen but instead declined compared to the $78,700 level on August 24, indicating that the rising market sentiment has not been supported by corresponding price momentum. From the sentiment composition perspective, the current high level is primarily driven by the Fear & Greed Index. The index’s Z-score has reached +2.19σ—more than two standard deviations above the 365-day average—yet participant sentiment remains only mildly optimistic. The data shows that the current “extreme greed” does not reflect a broad strengthening across all sentiment indicators, but rather a significant rebound in the Fear & Greed Index relative to its subdued baseline over the past year. The analysis notes that a high sentiment index alone does not necessarily signal an imminent market downturn; however, the combination of extreme optimism and lack of sustained price appreciation may make the market more sensitive to weakening demand. To confirm a more sustainable bullish environment, Bitcoin’s price must validate the elevated sentiment through further momentum growth, and other sentiment indicators must also improve in tandem. Conversely, if high sentiment persists without corresponding demand or price support, the risk of a market correction may increase.