Crypto Fear & Greed Index Hits Highest Since November 2021

A key gauge of investor sentiment suggests the crypto market may take a bull breather.

The Crypto Fear & Greed Index has jumped to 70.6, the highest since November 2021, according to data source alternative.me. The index, which ranges from 0 to 100, uses several metrics, including market momentum, volatility, volume and social media, to analyze and measure market sentiment for bitcoin and prominent alternative cryptocurrencies.

Values between 50 and 74 signal "greed," while readings above 75 indicate "extreme greed." The higher the score, the more confident investors feel about bitcoin's prospects.

Savvy traders prefer buying when the index signals extreme fear, and become cautious when it signals investor greed. As legendary investor Warren Buffett once said: "It's wise for investors to be fearful when others are greedy and to be greedy only when others are fearful."

In other words, bitcoin [BTC] could see a pause in the bullish run that has seen it gain 28% in less than two weeks.

The leading cryptocurrency's relative strength index also suggests the same. The RSI shows an above-70, or overbought, reading. Overbought readings on the RSI often presage bull market breathers.

Bitcoin, the leading cryptocurrency by market value, touched a 17-month high above $35,000 earlier this week, predominantly on the back of spot ETF speculation. The total market capitalization of all cryptocurrencies has surged to $1.26 trillion from $1.01 trillion two weeks ago.