This is a tiny version of the classic Icelandic Lopi Sweater, Lopapeysa if you want to practice your Icelandic!
This little project is a great stash buster - also by knitting the tiny version you are in fact using all the techniques needed for knitting a full sized sweater. I’ve used this little pattern for over a decade in my lopapeysa knitting classes The little lopapeysa and Iceland upside down - yeah, you guessed it, in the latter one we knit the sweater top-down.
Although the authentic Icelandic way of knitting a sweater is bottom-up, most of my patterns are top-down - some of them in fact published with both versions included. As a knitter I’ve always connected better with sweater projects when working from the neck down - which is why I’ve adapted my patterns to the top-down method. This is of course a knitter’s choice.

Yarn: Léttlopi (or any lopi you may have in your stash) in two colors.
Needles: 4.5mm/US7, or needles you choose to match your yarn. Lopi is so lofty and loosely spun that you can choose large or small needles and the wool will fluff out and use the space you give it. I always use a long circular needle and the magic loop method for knitting small diameters - but by all means, choose the method you like the most!
Gauge: Not really important - since the exact size is probably less important with this project than when you’re knitting for a living breathing person. A common gauge for knitting full sweaters in Léttlopi is 18 stitches x 24 rows = 10 x 10 cm / 4 x 4”.