Are You Greedy? Take a Look
What is the Crypto Fear and Greed Index?
The Crypto Fear and Greed Index uses social signals and market trends to determine the overall sentiment of the crypto market based on Bitcoin and other major cryptocurrencies. It is called an index because it takes multiple data sources and combines them into a single number.
The index is divided into the following four categories:
0-24: Extreme Fear (orange)
25-49: Fear (amber/yellow)
50-74: Greed (light green)
75-100: Extreme Greed (green)
How is the Crypto Fear and Greed Index Used?
You may have noticed that the cryptocurrency market can be volatile at times. This is partly due to the reactions of emotional investors in the market. People may feel FOMO (Fear of Missing Out) and show greed when the market is rising. They may panic and sell their coins when the market is falling.
Many investors use the index as a market indicator, meaning it serves as a tool that helps them make smarter trades by providing insights about the market. Analyzing the overall sentiment and emotions that drive the market has helped many investors perform better in the market.
The creators of the index explain how it can help you trade:
Extreme fear can turn into a buying opportunity due to investors being overly anxious.
Extreme greed can mean that investors are too greedy and that the market could be due for a correction.
