‘Emotional Enthusiasm’ of Crypto Bulls Triggers a Warning Sign

The signs portending renewed pain ahead in the crypto world are piling up, with a technical indicator showing the Bloomberg Galaxy Crypto Index at its most overbought since hitting a record last year.

A recent rise in the index, which coincides with a surge in the prices of some of the largest cryptocurrencies, has brought it to its most expensive level since January 2018, according to the GTI Global Strength Indicator. The last time the index reached a similar level coincided with its 2018 peak of $1,667 on Jan. 8. It dropped more than 65 percent over the subsequent three months.