Crypto Fear & Greed Index

When should you sell and buy crypto? Today, we’ll examine this question through the lens of the Crypto Fear & Greed Index.

The Fear & Greed Index analyzes the sentiment in the cryptocurrency market. The value ranges from 0 to 100 and is based on coin volatility, trends, trading volume, and search queries.

The indicator was created for the stock market but is actively used for cryptocurrencies as well.

How does it work?

– 0-24: Extreme Fear

– 25-49: Fear

– 50-74: Greed

– 75-100: Extreme Greed

Why is this important?

– Understanding sentiments helps predict market behavior.

– When the index shows "fear", it's a good time to buy, but if it shows "greed", it's a good time to sell.

– The indicator helps identify periods when the market is oversold or overbought.

Examples of use:

– Buying in a period of "fear". By early September 2023, the index started moving into the zone of "extreme fear". Further, more buyers entered the market, and BTC gradually rose from $25,000 to $73,000 at its peak.

– Buying in a period of "greed". Over the last month, the index remained in the "greed" zone, indicating a possible correction. As a result, BTC dropped to $59,000.

In any case, one should not rely solely on Crypto Fear & Greed. To make informed decisions, it's important to combine the index with other tools.