Sentiment History Crypto Fear & Greed Index Over Time
Here is a simple plot of the Fear & Greed Index over time, where a value of 0 means “Extreme Fear” while a value of 100 represents “Extreme Greed”.
Why Measure Fear and Greed?
The crypto market behaviour is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in irrational reaction of seeing red numbers. With our Fear and Greed Index, we try to save you from your own emotional over-reations. There are two simple assumptions:
• Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.
• When Investors are getting too greedy, that means the market is due for a correction.
Therefore, we analyse the current sentiment of the Bitcoin market and crunch the numbers into a simple meter from 0 to 100. Zero means “Extreme Fear”, while 100 means “Extreme Greed”. See below for further information on our data sources.
We are gathering data from the five following sources. Each data point is valued the same as the day before in order to visualize a meaningful progress in sentiment change of the crypto market.
First of all, the current index is for bitcoin only (we offer separate indices for large alt coins soon), because a big part of it is the volatility of the coin price.
But let’s list all the different factors we’re including in the current index:
Volatility (25 %)
We’re measuring the current volatility and max. drawdowns of bitcoin and compare it with the corresponding average values of the last 30 days and 90 days. We argue that an unusual rise in volatility is a sign of a fearful market.
Market Momentum/Volume (25%)
Also, we’re measuring the current volume and market momentum (again in comparison with the last 30/90 day average values) and put those two values together. Generally, when we see high buying volumes in a positive market on a daily basis, we conclude that the market acts overly greedy / too bullish.
Social Media (15%)
While our reddit sentiment analysis is still not in the live index (we’re still experimenting some market-related key words in the text processing algorithm), our twitter analysis is running. There, we gather and count posts on various hashtags for each coin (publicly, we show only those for Bitcoin) and check how fast and how many interactions they receive in certain time frames).
A unusual high interaction rate results in a grown public interest in the coin and in our eyes, corresponds to a greedy market behaviour.
Together with strawpoll.com (disclaimer: we own this site, too), quite a large public polling platform, we’re conducting weekly crypto polls and ask people how they see the market. Usually, we’re seeing 2,000 – 3,000 votes on each poll, so we do get a picture of the sentiment of a group of crypto investors. We don’t give those results too much attention, but it was quite useful in the beginning of our studies. You can see some recent results here.
The dominance of a coin resembles the market cap share of the whole crypto market. Especially for Bitcoin, we think that a rise in Bitcoin dominance is caused by a fear of (and thus a reduction of) too speculative alt-coin investments, since Bitcoin is becoming more and more the safe haven of crypto.
On the other side, when Bitcoin dominance shrinks, people are getting more greedy by investing in more risky alt-coins, dreaming of their chance in next big bull run.
Anyhow, analyzing the dominance for a coin other than Bitcoin, you could argue the other way round, since more interest in an alt-coin may conclude a bullish/greedy behaviour for that specific coin.
We pull Google Trends data for various Bitcoin related search queries and crunch those numbers, especially the change of search volumes as well as recommended other currently popular searches.
Disclaimer: No Investment Advice
* The information provided on this website does not constitute investment advice, financial advice, trading advice, or any other sort of advice and you should not treat any of the website's content as such. Alternatively.We do not recommend that any cryptocurrency should be bought, sold, or held by you from data on this website, do understand that our data may be out of date by the time you read it. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
Read the Disclaimer : All content provided herein our website, hyperlinked sites, associated applications, forums, blogs, social media accounts and other platforms (“Site”) is for your general information only, procured from third party sources. We make no warranties of any kind in relation to our content, including but not limited to accuracy and updatedness. No part of the content that we provide constitutes financial advice, legal advice or any other form of advice meant for your specific reliance for any purpose. Any use or reliance on our content is solely at your own risk and discretion. You should conduct your own research, review, analyse and verify our content before relying on them. Trading is a highly risky activity that can lead to major losses, please therefore consult your financial advisor before making any decision. No content on our Site is meant to be a solicitation or offer