What is the Fear & Greed Index?

The Fear & Greed Index is a popular sentiment indicator that measures investor emotions for Bitcoin and the broader crypto market. It helps you understand whether the market is currently in a state of fear or greed.

The index score ranges from 0 to 100:

0 – 24 😱 Extreme Fear – Investors are panicking

25 – 49 😟 Fear – Uncertainty and hesitation dominate

50 – 74 😊 Greed – Investors are enthusiastic

75 – 100 🚀 Extreme Greed – Bubble risk, FOMO at its peak

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🧮 How is the Fear & Greed Index Calculated?

The Fear & Greed Index is calculated using a weighted average of six main components collected from different data sources. The goal is to determine whether the market is currently dominated by fear or greed.

The 6 Key Components:

1. Volatility (Weight: 25%)

Daily price volatility of Bitcoin is measured.

Compares 30-day and 90-day fluctuations.

Sudden drops or extreme moves signal fear.

2. Market Volume & Momentum (Weight: 25%)

Analyzes Bitcoin’s trading volume and overall momentum.

Increasing volume with price growth signals greed.

3. Social Media (Weight: 15%)

Tracks discussions and engagement on platforms like Twitter and Reddit.

High interest and activity indicate greed.

4. Surveys (Weight: 15%) (sometimes disabled)

Collects direct responses from investors about their market expectations.

Example: “Will the market rise or fall this week?”

5. Bitcoin Dominance (Weight: 10%)

Measures BTC’s share of the total crypto market cap.

Rising dominance suggests investors are leaving altcoins for Bitcoin, a sign of fear.

6. Google Trends (Weight: 10%)

Analyzes Google search data.

Terms like “Bitcoin crash” signal fear, while “Buy Bitcoin” signals greed.

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How to Interpret the Index?

🔻 Extreme Fear (0–24)

Investors lack confidence.

Selling pressure is high.

Often seen as a buying opportunity (Buffett’s rule: “Be fearful when others are greedy, and greedy when others are fearful”).

🔺 Extreme Greed (75–100)

Investors expect continuous growth.

FOMO (Fear of Missing Out) dominates behavior.

Can be a warning sign of a market bubble or a good time to take profits.

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👉 In summary, the Fear & Greed Index is not a perfect predictor, but it is a useful sentiment tool to help identify potential market tops and bottoms in crypto.

What is the Fear & Greed Index?

The Fear & Greed Index is a popular sentiment indicator that measures investor emotions for Bitcoin and the broader crypto market. It helps you understand whether the market is currently in a state of fear or greed.

The index score ranges from 0 to 100:

0 – 24 😱 Extreme Fear – Investors are panicking

25 – 49 😟 Fear – Uncertainty and hesitation dominate

50 – 74 😊 Greed – Investors are enthusiastic

75 – 100 🚀 Extreme Greed – Bubble risk, FOMO at its peak

---

🧮 How is the Fear & Greed Index Calculated?

The Fear & Greed Index is calculated using a weighted average of six main components collected from different data sources. The goal is to determine whether the market is currently dominated by fear or greed.

The 6 Key Components:

1. Volatility (Weight: 25%)

Daily price volatility of Bitcoin is measured.

Compares 30-day and 90-day fluctuations.

Sudden drops or extreme moves signal fear.

2. Market Volume & Momentum (Weight: 25%)

Analyzes Bitcoin’s trading volume and overall momentum.

Increasing volume with price growth signals greed.

3. Social Media (Weight: 15%)

Tracks discussions and engagement on platforms like Twitter and Reddit.

High interest and activity indicate greed.

4. Surveys (Weight: 15%) (sometimes disabled)

Collects direct responses from investors about their market expectations.

Example: “Will the market rise or fall this week?”

5. Bitcoin Dominance (Weight: 10%)

Measures BTC’s share of the total crypto market cap.

Rising dominance suggests investors are leaving altcoins for Bitcoin, a sign of fear.

6. Google Trends (Weight: 10%)

Analyzes Google search data.

Terms like “Bitcoin crash” signal fear, while “Buy Bitcoin” signals greed.

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How to Interpret the Index?

🔻 Extreme Fear (0–24)

Investors lack confidence.

Selling pressure is high.

Often seen as a buying opportunity (Buffett’s rule: “Be fearful when others are greedy, and greedy when others are fearful”).

🔺 Extreme Greed (75–100)

Investors expect continuous growth.

FOMO (Fear of Missing Out) dominates behavior.

Can be a warning sign of a market bubble or a good time to take profits.

---

👉 In summary, the Fear & Greed Index is not a perfect predictor, but it is a useful sentiment tool to help identify potential market tops and bottoms in crypto.