The crypto market sentiment has turned to greed, signaling a bullish stance among investors.

According to crypto data source Alternative.me, the Fear and Greed Index is currently at 71/100, representing a period of greed among Bitcoin (BTC) investors. This comes as the leading digital asset surges past the $45,000 resistance level as anticipation around potential spot Bitcoin exchange-traded funds (ETFs) builds up.

Greedy Market Sentiment

As a tool that measures sentiment in the crypto market, the Fear and Greed Index uses several factors, including volatility, market momentum, social media, surveys, Bitcoin’s dominance, and trends, to analyze investor behavior. On a scale of 0 to 100, 0 signals extreme fear, 50 signifies neutrality, and 100 indicates extreme greed.

The index has two assumptions: extreme fear is a sign that investors are too worried and could be a buying opportunity, while extreme greed means the market is rising and is due for correction. The latter could be an indication that investors need to exercise more caution.

The fear of missing out (FOMO) tends to kick in when BTC price surges; investors get greedy and impulsively buy and sell digital assets. With the index currently sitting at 71, a significant price move could pull the sentiment toward “extreme greed,” signaling that the rally may not continue for long.

BTC’s Latest Surge

In the past 24 hours, BTC has gained more than 7%, hitting its highest level since April 2022. The spike has placed the asset roughly 34% shy of its November 2021 all-time high of $69,000. The total crypto market cap has also rallied to its highest level of $1.82 trillion since May 2022, 40% down from its all-time high of $3 trillion.

With bitcoin trading above $45,000, the number of traders that saw over $140 million in liquidations also sits above 45,000. CryptoPotato reported that around $110 million of the liquidations came from short positions, with the largest liquidated order worth $10.16 million.

The latest surge can be attributed to the excitement surrounding over a dozen pending spot Bitcoin ETF applications. The race to launch the first spot Bitcoin ETF in the U.S. is seeing participation from traditional finance giants like BlackRock, Ark Invest, Fidelity, Grayscale Investments, Galaxy Digital, VanEck, and others. The crypto community expects the Securities and Exchange Commission’s decision to be announced between January 8 and 10.