The current sentiment of the cryptocurrency market is showing "extreme greed," according to Crypto Fear & Greed Index by tracker Alternative.me.
The index has hit a high of 91 points, its largest since June 26, 2019, as bitcoin continues to soar. About a month ago, the index was exhibiting "fear," at around 50 points.
The extreme greed comes as bitcoin is touching new heights. Its price has now crossed the $18,000 mark, and market capitalization has breached its previous all-time high record, according to TradingView. The surge to $18,000 occurred fast, within a few hours, as bitcoin was trading at around $17,000 levels a day ago.
When crypto investors get too greedy, that means the market is due for a correction, according to Alternative.me. The firm calculates the value of the fear and greed index daily on a scale of 0 to 100. Near-zero levels mean "extreme fear," while around 100 means "extreme greed."
Alternative.me takes into consideration five factors for calculating the index: Volatility (weight: 25%), Market Momentum/Volume (25%), Social Media (15%), Surveys (15%), Dominance (10%) and Trends (10%).