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Explained: What is the cryptocurrency Fear and Greed index? Read here

The tool indicates whether the market is in the bullish phase or stuck in the bearish phase. It is designed to measure two opposing emotions which are Fear and Greed. 

Explained: What is the cryptocurrency Fear and Greed index? Read here

New Delhi: Every financial market has two sides and crypto has it too. The Crypto market is considered very volatile by experts, as a heavy swing or a sudden fall with no notice can make or shake your portfolio. This is the reason that people find it a very risky yet profitable market.

After an upswing-October, bulls are trying to seize the market in November to take it to the next level.

All crypto predictions changes with time and so as the mood of the investors. That’s why measuring the mood of the market is a difficult task. Here comes the Fear & Greed index which is said to be an indicator of the market sentiment.

What is the Fear and Greed index?

The cryptocurrency market is still in the maturing state and to check the investor’s sentiments and market state, the Fear and Greed index is used.

In simple words, The Fear and Greed index is a tool used to measure investor sentiments and feelings towards the market.

The tool indicates whether the market is in the bullish phase or stuck in the bearish phase. It is designed to measure two opposing emotions which are Fear and Greed.

Crypto trading

With the help of this index, one can easily identify whether the investors are worried or greedy. If the market is worried, the crypto market will trade much lower than their actual value, and when the sentiments are greedy then it can lead them to pay a price well over the market value.

The Extreme fear indicator on the index will imply the investors are too worried and there is an opportunity for the buyers to take entry into the market, on the other hand, being too much greedy indication will imply that the market is due for a correction.

How Crypto Fear and Greed Index calculated?

The index is scored from 0-100 to define the sentiment of the market. Where 0 score suggests that the investors are being fearful and it is the bearish phase. A score anywhere near 100 will indicate that the investors are being greedy and the market is in the bullish phase.

A score between 0 and 24  is defined as extreme fear, while fear term can be marked between 25 and 49.

Explained: What is the cryptocurrency Fear and Greed index? Read here

50 score can be marked as Neutral.

Explained: What is the cryptocurrency Fear and Greed index? Read here

A score from 51 to 74 will be marked as greed and anything above 75 is extreme greed.

Explained: What is the cryptocurrency Fear and Greed index? Read here

As per the Alternative.me, here is the list of all the different factors that they include in the current index.

  1. Volatility (25 %)
  2. Market Momentum/Volume (25%)
  3. Social Media (15%)
  4. Surveys (15%) currently paused
  5. Dominance (10%)
  6. Trends (10%)