Index abbreviation FGI
Index NameFear & Greed Index
Official website: https://alternative.me/crypto/fear-and-greed-index/
Compiled document Crypto Fear & Greed Index
Introduction Cryptocurrency market behavior is very emotional. When the market is rising, people tend to get greedy, which leads to FOMO (fear of missing out). When the market is falling, people often sell their cryptocurrencies in an irrational reaction. With the Fear and Greed Index, we try to stop you from overreacting emotionally. There are two simple assumptions: one is that extreme fear may be a sign that investors are too worried, which may be an opportunity to buy; the other is that when investors become too greedy, it means that the market will have a correction. Therefore, we analyze the current sentiment of the Bitcoin market and compress these market movements into an index range from 0 to 100. 0 means "extreme fear" and 100 means "extreme greed."
Operation method: I manually backtested BTC's fgi data for a full 4 years from July 1, 2020 to June 31, 2024 (as shown in the figure). We can choose to invest in 1 BTC when the index is ≤27, 2 BTC when it is ≤22, 4 BTC when it is ≤18, and 8 BTC when it is ≤18. Similarly, when the fgi is high, we can sell the corresponding number of shares.
The number of shares can be any value (such as 100USDT). After a cycle, the principal of the fixed investment will be sold back, and the rest is your profit (BTC). This strategy is risk-free. The key is to persist in it for a long time without being disturbed by external factors. I wish you a full return on investment.
