Crypto Fear & Greed Index: Measure of Crypto Investor Sentiment.

In the highly volatile crypto market, crowd psychology often influences short-term prices stronger than technical analysis. The Fear & Greed Index – ranging from 0 (extreme fear) to 100 (extreme greed) – is an effective tool for assessing risk and timing entries/exits in the market.

Meaning:

  • Extreme Fear (0–24): Extremely pessimistic sentiment – potential accumulation opportunity.

  • Extreme Greed (75–100): Overly optimistic – high risk of correction.

  • A decrease while still in the 'Greed' zone indicates that the bullish momentum is weakening, which may signal an accumulation phase.

Main components:

  1. Price volatility (25%) – Strong fluctuations = fear.

  2. Volume & momentum (25%) – Strong buying = greed.

  3. Social media (15%) – Positive interactions = optimism.

  4. Investor Survey (15%) – Temporarily paused.

  5. BTC Market Share (10%) – BTC increasing dominance = avoiding risk.

  6. Google Trends (10%) – Searches for 'buy BTC' increase = FOMO sentiment.

Application strategy:

  • Counter-trend thinking: Fear to buy, greed to sell.

  • Combine technical analysis to confirm reversal points.

  • Distinguishing investment & trading: Long-term leveraging psychological bottom.

  • Risk management: Diversification, always set stop-loss.

Conclusion:

The Fear & Greed Index does not predict prices, but it is an effective indicator of market sentiment. When used correctly, it can help you avoid FOMO, preserve capital, and seize opportunities during the most emotional market times.

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