A key gauge of investor sentiment, the Crypto Fear & Greed Index, currently signals strong bullish sentiment and increased risk appetite among investors.

The Crypto Fear & Greed Index surged to 79, marking its highest level since Nov. 2021 when Bitcoin soared to an all-time high above $69,000.

The index ranges from 0 to 100 and analyzes market sentiment for Bitcoin and other top cryptocurrencies. It considers metrics like market momentum, volatility, volume, and social media activity.

JUST IN: Crypto Fear & Greed Index hits "Extreme Greed" with a value of 79, the highest since November 2021. pic.twitter.com/IOKuMj4WAA

— CoinGecko (@coingecko) February 13, 2024

Readings between 50 and 74 mean “greed,” while above 75 is “extreme greed.” The higher the number, the more confident investors are about Bitcoin. As of Tuesday, the index showed extreme greed, hinting at a possible market correction.

Values below 50 typically indicate “fear” or a cautious sentiment among investors.

Analyst Predicts Aggressive Rally as Bitcoin Exceeds $50K

The jump comes as Bitcoin surged past $50,000 on Tuesday, propelled by a surge in investments from spot Bitcoin exchange-traded funds (ETFs). The cryptocurrency market grew by over 3.5% in just 24 hours, reaching $1.87t.

The market has broken through its January peak and is currently at its highest level since April 2022, according to FxPro senior market analyst Alex Kuptsikevich.

“Confidently gaining momentum even before bitcoin halved, and with the Fed’s rate cut date still some way off, the crypto is confounding not only the pessimists but also the expectations of the cautious. This is a fertile environment for FOMO,” he said.

“Bitcoin has breached the $50.2K mark, surpassing the psychologically important round level and the January highs set at the time of the spot ETF launch,” the analyst added. “Looking to the medium term, be prepared for a move out of the $46-52K range to mark the start of an aggressive rally.”

Crypto Fund Investments Jumped by $1.1B in Past Week

Investment momentum in new issuers is looking strong. CoinShares on Monday reported a substantial increase of $1.1b in crypto fund investments last week, following a $0.7b inflow the previous week.

Weekly investments in Bitcoin surged by $1.08b, Ethereum saw a $17m increase, Cardano experienced a $6m rise, and Solana had a modest uptick of just $0.1 million.

Additionally, BlackRock and Fidelity’s spot Bitcoin ETFs have entered the ranks of the top 10 funds with the greatest inflows in January.

So far this year, crypto funds have experienced inflows totaling $2.7b, bringing total assets under management to $59b — the highest level since the beginning of 2022.