Understanding the Fear & Greed Index

The Crypto Fear & Greed Index, provided by alternative.me, aims to measure the current sentiment of the Bitcoin and larger cryptocurrency market. It is calculated daily based on several factors:

• Volatility (25%): Measures current volatility and compares it to 30/90 day averages. High volatility is a sign of a fearful market.
• Market Momentum/Volume (25%): Compares current volume and momentum to 30/90 day averages. High buying volumes in a positive market suggest greed.
• Social Media (15%): Analyzes sentiment and interaction rates on social platforms (historically Twitter). High interaction and positive sentiment can indicate greed.
• Dominance (10%): Bitcoin's market cap share. A rise in Bitcoin dominance can indicate fear (flight to safety within crypto), while shrinking dominance might suggest greed (investing in riskier altcoins).
• Trends (10%): Google Trends data for various Bitcoin-related search queries. Rising "how to buy Bitcoin" queries might indicate greed.
• Surveys (15% - currently paused): Direct investor surveys.

General Interpretations (Not Financial Advice):

• 0-24 (Extreme Fear): May indicate investors are excessively worried, potentially presenting a buying opportunity for contrarians.
• 25-49 (Fear): General cautiousness in the market.
• 50 (Neutral): Market sentiment is balanced.
• 51-74 (Greed): Investors are becoming increasingly optimistic and bullish.
• 75-100 (Extreme Greed): May indicate the market is due for a correction as FOMO (Fear Of Missing Out) is high.