Fear & Greed Index

Overview

The Fear and Greed Index is a sentiment tool often used in cryptocurrency markets, particularly Bitcoin, to measure the market's general state of emotional drive. The index ranges from 0 to 100, with 0 representing "Extreme Fear" and 100 representing "Extreme Greed".

Calculation

The Fear and Greed Index is calculated based on the following factors:

  • Volatility (25%): Measures the current volatility and maximum drawdowns of Bitcoin and compares it with the corresponding average values of the last 30 and 90 days.

  • Market Momentum/Volume (25%): Measures the current volume and market momentum in comparison with the last 30/90 day average values.

  • Social Media (15%): Gathers and counts posts on various hashtags for each coin and checks how fast and how many interactions they receive in certain time frames.

  • Surveys (15%): Conducts weekly crypto polls and asks people how they see the market.

  • Dominance (10%): The dominance of a coin resembles the market cap share of the whole crypto market.

  • Trends (10%): Pulls Google Trends data for various Bitcoin-related search queries and crunches those numbers.

Interpretation

The Fear and Greed Index is interpreted as follows:

  • Values near 0 indicate "Extreme Fear", suggesting that the market may be oversold and that a buying opportunity may be present.

  • Values near 100 indicate "Extreme Greed", suggesting that the market may be overbought and due for a correction or pullback.

Indicator Triggers:

The Fear & Greed indicator uses only basic general triggers: Cross level and In zone.

Last updated