Crypto Fear and Greed Index Hits 7: Is It a Good Time to Buy Bitcoin?
The emotions surrounding the crypto market might be a crucial sign for investors. However, there are a lot of factors that need to be taken into account to calculate the Fear and Greed Index.
— Crypto Rover (@rovercrc) June 15, 2022
The 5 Markers of Fear vs Greed Index
- Volatility — the current levels of volatility are being analysed and compared to the stats of the previous month and the last 90 days. Increased volatility usually means rising fear in the crypto market.
- Social media — monitoring social media networks is very important to calculate the Crypto Fear and Greed Index, as the high interaction rate always leads to increased public awareness of cryptocurrency, which usually means increased greediness in the market.
- Market volume — the total market capitalization and the momentum of the last 90 days, including buying sentiment and overall activity can determine whether investors are acting overly greedy or whether they’re likely to sell out.
- Dominance — the overall percentage of how much the coin takes up in the general market cap. This metric is most sensitive to Bitcoin. For instance, if Bitcoin (BTC) is rising in dominance, it might mean that public trust in altcoins has decreased.
- Trends — Google Trends data shows trending searches and the dynamic changes that surround search volumes. The rising queries can mark a bullish or bearish sentiment. For instance, the ‘Bitcoin price drop’ is a clear indicator of fear among crypto investors.
Extreme Fear = Buying Opportunity?
According to current trends, the Crypto Fear & Greed Index is 7, which is just 7 points away from max extreme fear. Plus, it’s the longest consecutive run for extreme fear in the history of this metric, as it’s 58 subsequent days already. Furthermore, the level of extreme fear was at 11, which means the chaos in crypto prices during the last week might have pushed the panic button.