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Fear and Greed Index

The Cryptocurrency Fear & Greed Index is based on volatility, social media sentiment, surveys, market dynamics, and much more.
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What is the cryptocurrency fear and greed index?

The Fear and Greed Index is a variable in the crypto community that shows market sentiment. The fear and greed index is based on the interest in the main global digital currency – Bitcoin. The higher the hype around BTC, the higher the indicator.

The index is a numerical counter with a scale from 0 to 100 points. The creators of the index are considered to be the companies Alternative.

It got its name because of the sentiments of market participants, as most traders buy Bitcoin and other cryptocurrencies out of greed, and later fear losing their profits or ending up with nothing.

How is the Fear and Greed Index calculated?

The Crypto Fear & Greed Index service, as mentioned before, is built around the demand for Bitcoin from crypto holders. The situation surrounding BTC is the determining factor in the change of the index value.

Typically, five reasons for the change in the fear and greed index are identified.

  • Volatility. The higher this indicator, the more chaos and fear in the market. Developers take into account 30- and 90-day timeframes.
  • Trading volume. A high market impulse to buy Bitcoin indicates that market participants believe in it.
  • Activity on social media. The number of mentions of Bitcoin on X, Discord, and other traditionally "crypto" social networks helps move the index needle to the right.
  • BTC dominance. Here, index creators rely on Bitcoin’s share of the market capitalization in the crypto space. The higher Bitcoin’s share in the market, the more confident the community is in its reliability compared to other cryptocurrencies.
  • Search queries. The more search queries related to Bitcoin, the more factors point to the greed of crypto traders.

How to use the Fear and Greed Index?

An experienced trader prefers not to enter the market when the Fear and Greed Index is excessively high, as any sharp increase in BTC price is usually followed by a correction period, when the price retreats towards previous values.

How often do we update the Fear and Greed Index?

We update the Fear and Greed Index every 24 hours – that’s the amount of time the AI tools of Alternative need to perform analytical tasks.