Over the past seven days, Bitcoin (CRYPTO: BTC) is up a head-spinning 20%, making it one of the best weeks for the world's most popular cryptocurrency in nearly two years. And, as might be expected, that sizzling recent performance has energized the Bitcoin bulls, who are now predicting that it could be on one of its historic runs as we head into 2024.

And that's exactly what has me so concerned. The market could be overheating, pulling in a lot of unsuspecting investors who are hoping to make a quick profit from a rapid price appreciation in the token. As Warren Buffett once remarked, "Be fearful when others are greedy, and greedy only when others are fearful." Of course, Buffett (who famously does not invest in Bitcoin) was talking about stock, not cryptocurrencies, when he made that comment, but it's a useful way to think about what's happening right now with Bitcoin.

Warren Buffett's insight into investor psychology and market sentiment is why I'm keeping a careful eye on Bitcoin's Fear & Greed Index, which suddenly shifted into "greed" territory this week. In fact, the Fear & Greed Index is at its highest greed level since Bitcoin reached its all-time high of $69,000 back in November 2021. Back then, Bitcoin was hitting stratospheric new highs every day, and investors were convinced that the upward trajectory would continue forever. But if you were tracking the Fear & Greed Index, then you knew that there were obvious warning signs, and that the chances for a crypto market correction were increasing.

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Source Fool.com