The Crypto Fear & Greed Index has broken out an early signal that shows a change in investor sentiment. It is now a classic case of signaling a shift to “greed” within crypto. This trend indicates increased overall bullish sentiment and significant demand to buy cryptocurrencies across the entire cryptocurrency market. The Fear & Greed Index The index, offered by alternative.me, combines data from different sources to generate a score between 0 to 100 that indicates the market sentiment.
The index reached a score of 70 this week, up from 64 last week. This reading indicates growing confidence among investors. The overall score is nearing the start of the “Extreme Greed” range, which starts at 75.
The Crypto Fear & Greed Index combines several different indicators to measure overall market sentiment. These are the factors that introduce volatility itself, market momentum, social media sentiment, Bitcoin dominance, and search activity. By balancing these factors, the overall index seeks to provide a high-level, but nuanced view of investor sentiment.
This is probably the most important factor we look at. The index is constantly at work examining price movements and volume in the market. This enables it to better determine the strength of buying or selling pressure by using market momentum. Social media presence is analyzed to gauge the level of discourse and buzz around a cryptocurrency.
Search trends for key crypto-related terms are used to understand the overall level of interest, as well as the level of awareness. Third, volatility—often undersold as simply the degree of price variation over time—is a key part of measuring how much fear or uncertainty exists in the market. The index distills all of this data down into one comprehensive number, from 0 to 100.
At 70, today’s reading is a strong sign that investors are becoming more bullish. Perhaps then they will begin to make decisions based on optimism rather than caution. This can be a sign of robust buying demand and increasing institutional bullishness in the crypto markets.
