Fear and Greed Index
Crypto Fear and Greed Index is based on volatility, social media sentiments, surveys, market momentum, and more.
Get the Answers to Your Questions
Find out more about the Fear & Greed Index and how it's calculated before adding it to your toolset.
What Is Crypto Fear and Greed Index
The ups and downs of the crypto market can be quite steep and it's not rare for investors to get discouraged. The Crypto Fear and Greed Index makes an assessment of the dominant mood on the market, so the psychological factor is also taken into account.
The atmosphere of Fear, for example, drives many investors to panic and sell their crypto assets. This is a potential buying opportunity.
While the times of Greed, on the contrary, foster a certain recklessness in investment decisions. Potentially, they indicate that the market will be down soon.
Checking the index to find out where we currently stand psychologically is a good way to avoid common pitfalls and make wiser investment decisions – decisions that will pass the test of time.
How Is Fear & Greed Calculated
The volatile crypto market is in fact guided by the psychological currents running underneath it. So, how do we go about calculating the fear & greed in the air? The psychological backdrop of the crypto market finds its reflection in a number of mediums, from social media posts to Google Trends. The market itself, when interpreted in combination with data from those outside mediums, can tell us a lot about the investing environment. Our Fear & Greed Index takes into account all those factors and, assigning them respective weight, molds them into one unified result. These are the factors that make up the Fear & Greed index
How to Use Fear and Greed Index or What to Use It For
If you're about to make an investment decision, but are unsure just how much that decision is affected by the general atmosphere of Fear or Greed on the market, checking the index can be quite helpful.
The Fear Index era is all about selling, so valuable assets are sometimes "thrown out with the bathwater." In contrast, the Greed Index era is characterized by careless investments in assets the value of which is overblown.
The Fear and Greed Index is just another tool to support your decision-making process.
How Often Do We Update Crypto Fear and Greed Index
We update the Crypto Fear and Greed Index every 12 hours.
What Does Fear & Greed Index Take Into Account
Here are all the factors that contribute to the Index:
A rise in volatility contributes to the rise of fear in the market. To measure the volatility, we make respective comparisons to the average volatility value of Bitcoin in the previous 30 and 90 days. On the other hand, if we notice that volatility is falling, we assume the market's general mood is shifting more toward Greed. 25% of the index's result is based on this parameter.
Momentum/Volume of the Market
When we see that the buying volumes are unusually high in the market, we conclude that there is an atmosphere of greed. The way we calculate the momentum/market volume is similar to the way we calculate the previous factor: We compare the current stats to the average of the last 30 days and 90 days. 25% of the end results is based on this factor.
Social Media Posts
Monitoring hashtags of various coins on Twitter, we conclude that there is a tilt toward Greed when the hashtags get high interaction rates. It means interest in this or that coin is on the rise. On the contrary, when those numbers are falling, we assume the market is entering Fear territory. This factor carries about 15% weight of the end result
Asking people what they think of the crypto market directly is quite effective. That's why surveys are yet another aspect of the Fear & Greed Index. Typically, each survey gets anywhere between 2000 and 3000 votes. The opinions expressed in weekly surveys make up around 15% of the result.
If the dominance of Bitcoin is rising, that means that people are cautious about their crypto choices. In the atmosphere of Greed, investors are more open to experimenting with altcoins, as they hope one of those coin will make it big. On the other hand, in the times of Fear, they tend to stick with what they know, limiting risk. Bitcoin dominance contributes to the index by around 10%.
The data about the search queries of users regarding Bitcoin can tell us a lot about the general atmosphere in the market. For example, if a growing number of queries include "Bitcoin price manipulation," we interpret this as a sign of fear. On the other hand, if queries such as "How to buy crypto" are becoming more and more frequent, we're in for Greedy times. About 10% of the index's result is based on Google Trends.