Fear & Greed index crypto

0 – 24: Extreme Fear
25 – 48: Fear
48 – 53: Neutral
52 – 74: Greed
75 – 100: Extreme Greed

What’s the Idea behind Measuring Fear and Greed?

The Bitcoin market is a highly dynamic environment. When the market rises, people tend to get greedy, resulting in the famous FOMO (fear of missing out). People also sell their currencies impulsively when they see red figures. With its Fear and Greed Index, this team aims to shield people from their emotional overreactions. There are two key assumptions to keep in mind:

Investors who experience extreme dread may be too anxious. It is potentially a great moment to start investing.

The market is due for an alteration when investors become excessively enthusiastic.

As a response, this team investigates the current situation of the Bitcoin market and converts the information into a 0 to 100 scale. The value of “Extreme Fear” is zero and, “Extreme Greed’s” value is 100. The units below will show you the details about their data sources.

Sources of Information

The 5 foundations listed below are used by the team to gather information. Every single data point is regarded the same as the previous 24 hours to show substantial improvement in the crypto market’s attitude adjustment.

Because the price volatility of this currency is a big part of it, the current index is just for bitcoin (they will soon give separate guidelines for large alt currencies).

First, let’s go through all of the different foundations that make up the present index:

Volatility (25 percent)

They are comparing bitcoin’s current volatility and max drawdowns to the equivalent average values from the last 30 and 90 days. They claim that a sharp spike in volatility is a sign of a panicked market.

Market Volume/Momentum (25 percent)

In addition, they are combining the present volume and market motion (again, in contrast to the prior 30/90-day usual values) to arrive at a single value. When they see large daily trading volumes in a bullish market, they typically assume that the market is too greedy/bullish.

The Internet and social media (15 percent)

While their Reddit sentiment analysis isn’t yet live (they are still testing various market-related key terms in the text search algorithm), their Twitter sentiment analysis is. There, they collect and tally posts on numerous hashtags for each coin (openly, they only show those related to Bitcoin) and evaluate how many exchanges they receive in particular time windows, as well as how quickly they receive them. An unusually growing public interest in the currency results from a high level of engagement., which correlates to greedy market behavior in their opinion.

Surveys (15%) are currently on hold.

This team conducts weekly crypto polls with strawpoll.com (they also hold this site), a massive public polling platform, and ask people about their opinions on the market. Each poll receives an average of 2,000 to 3,000 votes, offering them an insight into the thoughts of a group of crypto investors. They do not pay much attention to such results nowadays, but they were quite useful when they initially began their study.

Possession of dominance (10 percent)

The dominance of a currency is reflected in its market cap share of the whole crypto market. They believe that the growth in Bitcoin dominance is due to a fear of (and consequently a decline in) excessively speculative alt-coin investments, as Bitcoin is increasingly becoming the crypto safe haven. As Bitcoin’s dominance falls, on the other side, individuals become greedier, investing in riskier alt-coins in the hopes of benefitting from the next great bull run. In any event, looking at dominance for a currency other than Bitcoin might lead to the opposite result, since rising interest in that coin could suggest bullish/greedy behavior.

Trends (10 percent)

They gather data from Google Trends for various Bitcoin-related search inquiries and analyze the numbers, concentrating on the search change volumes as well as other recently hot searches. If you use Google Trends to search about “Bitcoin,” for example, there will be little information offered to you. However, you can see that the phrase “bitcoin price manipulation” has increased by 1,550 percent in the box of related search queries since mid-2018. This is a clear sign of market panic, and it’s used to calculate the index.

API Rules for the Fear and Greed Index:

You may not use their information to establish a service that is similar to theirs.

You must appropriately acknowledge the data’s source and make a visible reference to it.

It is not permitted to utilize the site for commercial purposes. If you have any questions, please contact the team.

Not just the API, but all of their fear and greed data is affected.

Source: https://alternative.me/crypto/fear-and-greed-index/