When the Crypto Greed Index reaches a high level, it’s a sign that investors are overwhelmingly optimistic, driving prices up and often creating an overbought market. This intense optimism, however, can be a red flag, as markets with high greed levels tend to be more vulnerable to sudden corrections or even crashes.
While a high Greed Index doesn’t guarantee a crash, it does increase the risk. When emotions drive the market, volatility can spike, and a sharp drop may follow. It’s wise to exercise caution and strong risk management when greed takes over.
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