Crypto Fear and Greed Index Hits Record High at 81

The crypto fear and greed index has reached an all-time high of 81, according to CoinMarketCap. This extreme reading is a warning sign for investors, suggesting that the market may be overbought and due for a pullback.

Historically, when the index reaches such high levels, it has preceded both continued rallies and sharp corrections. In late 2021, the index stayed above 80 for several weeks before a major downturn, while in early 2023, it dipped to single digits, marking a local bottom for many assets.

The index is calculated by combining several market signals, including price movements of the top 10 cryptocurrencies by market capitalization, volatility, derivatives-market indicators, and stablecoin supply ratio. It also takes into account CoinMarketCap's own search data, which provides insight into retail interest.