The crypto asset sentiment index rose from 0.23 to 0.91 within a week, according to Max Shannon, senior research associate at crypto index fund manager Bitwise.

Google searches for altcoins and Ethereum also rose to a multiyear high, reminiscent of prior bear markets, which may signal a growing investor mindshare for altcoins and Ether ETH $4,539 , following Bitcoin’s latest all-time high above $124,000.

These developments mark a “classic froth-infused behaviour that can precede buyer exhaustion,” said Shannon in a Thursday X post.

Buyer exhaustion occurs when diminishing buy orders are overwhelmed by selling pressure, potentially leading to a Bitcoin BTC $117,793 pullback as capital rotates into other cryptocurrencies.

Bitcoin dipped below $118,000 on Thursday as investors digested comments from US Treasury Secretary Scott Bessent, who said the government had no plans to make additional purchases for its strategic Bitcoin reserve and separate digital asset stockpile.

Scott Bessent TV interview screenshot
Scott Bessent interview (Fox Business) Source: Foxbusiness.com

Federal Reserve, Central Bank, Bitcoin Analysis, Investments, Bitcoin Regulation, Donald Trump, Trading, Cryptocurrency Investment, Bitcoin Adoption, Bitcoin Reserve

However, Bessent backpedalled on his statements hours later, clarifying that his department was still exploring budget-neutral ways to acquire BTC for the Strategic Bitcoin Reserve.

“Treasury is committed to exploring budget-neutral pathways to acquire more Bitcoin to expand the reserve, and to execute on the President’s promise to make the United

Crypto Fear and Greed Index gauge
Crypto Fear & Greed Index (latest reading) Source: CoinMarketCap

States the ‘Bitcoin superpower of the world,’” Bessent wrote in an X post on Thursday.

The Crypto Fear & Greed Index shifted from “greed” to “neutral” territory, falling to 59 at the time of writing, down from 68 on Thursday, CoinMarketCap data shows.

Despite the drop in neutral territory, investor sentiment remains “elevated but shy of euphoria, leaving room for trend continuation if macro doesn’t deteriorate,” according to Stella Zlatareva, dispatch editor at digital asset investment platform Nexo.

Favorable policy developments, such as the Securities and Exchange Commission’s incoming Solana exchange-traded fund (ETF) decision deadline in October, signal that the “uptrend’s broader narrative remains intact,” she told Cointelegraph.

Buyer exhaustion may precede the September altcoin rally

While a wider crypto market correction may still occur during the lack of investor activity characteristic of August, many industry watchers are expecting an altcoin rally in September.

“We think current market conditions now suggest a potential shift towards a full-scale altcoin season as we approach September,” Coinbase Institutional’s global head of research, David Duong, wrote in a monthly outlook report on Thursday.

Altcoin season implies that at least 75% of the 50 largest altcoins by market capitalization outperform Bitcoin’s price over the previous 90 days.

Related: Bitcoin’s corporate boom raises ‘Fort Knox’ nationalization concerns

Altcoin Season Index chart
Altcoin Season Index (weekly rise) Source: CoinMarketCap

Meanwhile, the altcoin season index climbed from 33 to 42 during the past week, but remains below the 75 level, which signals the beginning of the altcoin season, CoinMarketCap data shows.

Meanwhile, Bitcoin and Ether prices stabilizing may “provide a great window for the first serious leg upwards for altcoins,” according to MN Trading Capital founder Michaël van de Poppe.

“They are primed to start running, just like Ethereum did. What’s the upside? Probably like 100-150% in the first run,” wrote the popular analyst in a Friday X post.