A crypto ‘fear and greed’ indicator is flashing a warning signal that shows investors are being extremely greedy as top cryptocurrencies hit record highs

A crypto ‘fear and greed’ indicator is flashing a warning signal that shows investors are being extremely greedy as top cryptocurrencies hit record highs

As the price of top cryptocurrencies hit all-time highs on Tuesday, a key sentiment index showed that crypto investors are displaying extreme greed.

A "crypto fear and greed" index, a metric published by Alternative.me, rose from 83 to 95 on Tuesday, suggesting a level of "Extreme Greed." Similar to other gauges that track fear on traditional stock markets, this crypto index uses a number of metrics to measure investor sentiment from a scale of zero to 100, ranging from "Extreme Fear" to "Extreme Greed".

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The tool measures two primary emotions that influence how likely investors are to purchase cryptocurrencies: fear and greed. Extreme fear is indicative of investors being too worried, meaning they are more likely to retreat from the market, prompting prices to fall and that could mark a good time to buy, according to Alternative.me. On the other hand, when investors get too greedy, this could indicate cryptocurrency prices are due for a correction.

The index last reached the same 95 level on January 6,