According to PANews, the Fear and Greed Index has slightly decreased to 93 from 94, maintaining its status in the 'Extreme Greed' category. This index, which ranges from 0 to 100, is a measure of market sentiment and is composed of several indicators.
The Fear and Greed Index is calculated based on six key factors: volatility, which accounts for 25% of the index; market trading volume, also at 25%; social media activity, contributing 15%; market surveys, also at 15%; Bitcoin's dominance in the overall market, which makes up 10%; and Google Trends data, which also contributes 10%. These components collectively provide insights into the prevailing mood of the market, helping investors gauge whether the market is driven by fear or greed.
The current reading of 93 suggests that the market is experiencing a high level of greed, which can often precede a market correction. Investors and analysts closely monitor this index as it can signal potential shifts in market dynamics. The slight decrease from the previous day's reading indicates a marginal change in sentiment, but the overall level remains significantly high, reflecting continued investor optimism and risk-taking behavior.