Understanding the Crypto Fear & Greed Index
The Bitcoin Fear and Greed Index is a sentiment analysis tool that helps investors gauge market psychology. Here’s how it works:
- Extreme Greed (FOMO): When prices surge rapidly, irrational buying occurs due to fear of missing out (FOMO), often signaling a potential market top.
- Extreme Fear: During sharp downturns, panic selling may indicate undervaluation, presenting buying opportunities.
Today’s Bitcoin Fear & Greed Index
Latest as of [Current Date]
Historical Trends:
Analyzing past cycles reveals patterns where extreme sentiment correlates with market reversals.
How the Index Is Calculated
The index evaluates BTC-specific metrics across six weighted categories:
| Metric | Weight | Description |
|---|---|---|
| Trading Volume | 25% | Higher BTC volume suggests greed; lower volume indicates fear. |
| Volatility | 25% | Increased price swings often reflect panic. |
| Social Media | 15% | Declining engagement (Twitter, Reddit) signals fear; hyperactivity implies greed. |
| Surveys | 15% | Polls assess retail and institutional sentiment. |
| Google Trends | 10% | Search volume spikes align with greed; drops suggest disinterest. |
| Dominance | 10% | Rising BTC dominance may indicate risk-off sentiment. |
Key Market Indicators
Complement your analysis with these metrics:
👉 Bitcoin Top-Selling Indicators
- 30-Day Long/Short Liquidation Ratio
- BTC Dominance (%)
- DeFi Total Value Locked (TVL)
- Ethereum Market Cap Dominance
- ETH Cumulative Burn
- Total Crypto Market Cap
FAQs
Q: How often is the Fear & Greed Index updated?
A: The index refreshes daily, incorporating real-time data from its six core metrics.
Q: Can this index predict price crashes?
A: While not a crystal ball, extreme values (e.g., >90 greed or <10 fear) historically precede corrections.
Q: Is the index applicable to altcoins?
A: Currently, it’s BTC-only. However, altcoins often follow Bitcoin’s sentiment trends.
Q: Why combine surveys with algorithmic data?
A: Surveys add a human layer to quantitative metrics, reducing algorithmic bias.
Note: Always cross-verify with technical and fundamental analysis before trading decisions.