In just 1 day, the Crypto Fear & Greed Index increased by 7 points from 70 to 77, reaching the “Extreme Greed” level, showing that investor excitement is peaking after Bitcoin set a new ATH of $76,400. This is a strong signal of optimism in the market, but also raises a warning about the possibility of an upcoming price correction.
When the index reaches “Extreme Greed,” it reflects a massive buying spree by investors who are expecting prices to continue rising and reaping large profits. However, excessive greed is also often a sign that the market may be facing a significant correction.
This Bitcoin price increase was driven by a series of factors, especially after the results of the US presidential election with the re-election of Donald Trump. This event contributed to strengthening investors' confidence in the cryptocurrency market, creating a strong wave of buying, causing Bitcoin trading volume and value to continue to climb.
With Bitcoin’s record high price, many investors have rushed to buy in order not to miss the opportunity, contributing to pushing the greed index to warning levels. However, experts warn that when the sentiment index reaches “Extreme Greed,” the risk of a price correction is greater due to profit-taking pressure from cautious investors.
This is a reminder for investors to be cautious when the market is too “hot.” To avoid letting FOMO psychology get out of control, investors should carefully evaluate and have a reasonable risk management strategy to avoid unwise decisions during this volatile market period.
