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.
---
👉 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.
---
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.
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