Indicator Overview

The indicator is the Crypto Fear & Greed Index. It gauges overall Bitcoin market sentiment, providing a score from 0 (Extreme Fear) to 100 (Extreme Greed). It is a composite index built on two simple principles: Extreme fear may be a buying opportunity, and extreme greed suggests a correction is near. It uses 6 key factors to assess the market's psychological state:

Volatility (25%): Measures Bitcoin's current volatility against 30- and 90-day averages. A sharp rise signals increasing fear.

Market Momentum & Volume (25%): Assesses volume and momentum against historical data. High positive volumes indicate excessive greed and overconfidence.

Social Media (15%): Monitors Twitter/X hashtag activity and engagement. Unusually high interaction reflects rising public interest, signalling greedy sentiment.

Surveys (15%): Weekly polls of investors provide direct emotional insight (currently paused, so weight is distributed).

BTC Dominance (10%): When Bitcoin's market share rises, investors seek safety (signalling fear). When it falls, risk appetite grows (signalling greed).

Trends (10%): Analyses search queries (e.g., Google Trends). A surge in fear-related searches (e.g., "bitcoin price manipulation") points to spreading fear.

How To Use

This index is a popular tool for adopting a contrarian position against the prevailing market mood.

Extreme Fear (Score 0-25): Indicates that investors are overly panicky. Historically suggests that a strong market bottom is close, presenting a potential high-conviction buying opportunity for long-term holders.

Extreme Greed (Score 75-100): Indicates the market is overheated and overconfident. Historically suggests that a market top is imminent, and a sharp price correction (sell-off) may be due.