Bitcoin FGI – Crypto Fear and Greed Index Live

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The Crypto Fear and Greed Index is a valuable cryptocurrency market sentiment tool to identify fear or greed level in crypto and Bitcoin investors. By just a glance at the indicator (index), investors can estimate if the crypto price is driven by fear or greed and if it’s a good time to buy or sell cryptocurrencies. It’s also known as the Bitcoin Fear and Greed Index because it mostly tracks data on the most popular cryptocurrency – Bitcoin. Check what’s the BTC fear and greed index today below.

Crypto Fear and Greed Index Today

The cryptocurrency prices are very volatile and so is the crypto FGI. If you’re trading cryptocurrencies often, it may be useful to follow the index daily. The gauge meter below shows the cryptocurrency market Fear and Greed index today. We update the index daily so that you could follow the latest market sentiment live.

Bitcoin Fear and Greed Index Live

Bitcoin FGI index on 11/08/2022.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

Crypto fear and greed index values

If you see that the crypto price is driven by fear, you may head to your crypto trading platform and consider buying because other investors are fearful, and cryptocurrencies could sell for a lower price. On the flip side, if the crypto market is driven by greed – be careful with buying. Now, let’s dive into what’s the Crypto Fear & Greed Index, how is it calculated, and what’s the index today and over time?

Extreme Fear and Extreme Greed

So, what does the current index reading mean for investors and how to react to extreme index levels? When you see index levels below 25 or above 76, these are considered extreme levels and you should pay close attention, especially if you have open positions.

Index levels below 25 – This means that investors are becoming increasingly bearish and are selling off their assets. This could be due to a variety of reasons such as political instability, economic uncertainty, or simply because they believe that the market is due for a correction.

Index levels above 76 – This means that investors are becoming increasingly bullish and are buying up assets. This could be due to a variety of reasons such as positive news, technical indicators, or simply because they believe that the market is due for a rally.

What is Crypto Fear And Greed Index?

Crypto Fear and Greed index is a financial strategy used to time the market by understanding how investor emotions influence their decisions regarding crypto investment. CNN Money initially developed the Fear and Greed Index (FGI) as a general market-timing tool to understand how investor emotions influence stock market investment decisions. However, the Fear and Greed Index has found its way into the cryptocurrency market as a critical component that helps determine whether it’s bullish or bearish. The term was coined to help investors avoid emotional overreactions when investing in cryptocurrency.

Theoretically, Crypto FGI can be used to gauge whether the pricing in the market is favourable. The index analyzes and measures sentiments surrounding cryptocurrency trends, mainly Bitcoin, from multiple sources. Just as the name suggests, FGI uses the two primary emotions of fear and greed to influence how much investors are willing to pay for crypto. Therefore, activating fear and greed has significant effects on market volatility, volume trade, and the general direction of cryptocurrency prices.

How is Crypto Fear and Greed Index Calculated?

Crypto Fear & Index may appear like describing the overall fear of the cryptocurrency market, but in reality, it measures mostly Bitcoin. Nonetheless, Bitcoin tends to represent what is happening in general and shows current sentiment. Therefore, it’s still relevant to other major cryptocurrencies like Ethereum, Solana, Cardano, Tether etc., and it doesn’t matter whether you trade cryptocurrencies on Revolut or eToro. Crypto Fear & Greed Index uses six indicators, often derived from both qualitative and quantitative measures.

1. Volatility – 25%

Measures the current price of Bitcoin and compares it with 30 and 90-day averages. A sharp rise in volatility might mean the market is fearful.

2. Market momentum / Volume – 25%

This indicator uses a combination of current Bitcoin market volume and market momentum. It then compares it to the average of the last 30 and 90 days. A strong upward momentum may suggest a bullish market, while a strong downward momentum may suggest a bearish market.

3. Social Media – 15%

Analyzes market sentiments based on the social media posts, Twitter hashtags, reactions on posts, etc. If the measured interactions increase sharply over a short period, it may be showing investor greed.

4. Dominance – 10%

This indicator measures the Bitcoin market cap share from the whole crypto market cap. An increase in market cap dominance by Bitcoin may indicate reduced speculation for other cryptocurrencies. This may represent a bearish response from the investors. Conversely, decreased dominance by BTC may indicate a rise in speculations of other cryptocurrencies, which in turn, may suggest a bullish market response.

5. Trends – 10%

The indicator looks at the Google trends data for Bitcoin and its related search terms/keywords. A rise in search volumes and recommendations from popular sites may trigger a bullish market.

6. (Discontinued) Surveys – 15%

This indicator is derived from a polling platform to see what individuals are thinking of the markets. NOTE: This indicator has been paused. It’s no longer used in the analysis.

Crypto Fear And Greed Index over time – Historical data

How does the cryptocurrency FGI work?

The crypto FGI calculates investor sentiments on a scale of 0 to 100. 0 represents extreme fear, where investors become overly bearish. 100 represents excessive greed leading to investors getting excessively bullish. The meter tracks market price variations daily, weekly, monthly, and yearly.

The logic is that excessive fear tends to drive down crypto prices (Bear Run), while too much greed tends to drive the prices up (Bull Run). The result is that most investors get greedy when the market is on the Bull Run, which results in fear of missing out (FOMO). On the other hand, people rush to sell their coins in an irrational reaction when they see prices go down. Understanding how investors react emotionally provides an opportunity for intelligent investors to take advantage of the market situation by taking a logical position. For a smart investor, the index’s extreme sides can help make wise crypto investment decisions. When the index measures extreme fear, most people are selling. However, it could be the best opportunity to buy. On the opposite end, when the market shows extreme greed, it could be an excellent opportunity to take profit (sell).

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

Crypto sentiment influence on the market

Crypto sentiment analysis looks at how the crypto investors feel about the market at the time of research. It emerges from the sentiment analysis, which checks the user and customer demands, driven mainly by social media engagements. Are people fearful, greedy, or simply neutral? The truth is, these emotions have a significant impact on the decisions investors make, even though they know the importance of technical and fundamental factors. In the crypto space, emotions run high and take centre stage when making investment decisions. Such actions lead to extremely high price volatility, which can be stressful for those who mistime the market but offers a greater opportunity to make money if you understand people’s emotions and master your own as well.

Does the Fear and Greed Index work in the crypto market?

Some academic research by behavioural economists has suggested that greed can interfere with our brain’s functionality by forcing it to ignore common sense and self-control. There could be no generally accepted research on the workings of greed. However, it’s been proven that fear and greed can become extremely powerful motivators in the investment circle. It’s because most investors are emotional with money, hence reactionary in the face of either fear or greed.

Criticisms of the Bitcoin FGI

Just like any other tool, the Fear & Greed Index has faced some criticism in the face of its successful applications by investors. Critics argue that FGI is just a barometer for market timing. Instead, they encourage investors to embrace “buy and hodl”. However, while some investors prefer a buy-and-hold strategy, it must be noted that day trading is part of the reasons why crypto is growing, and such traders need the Fear & Greed Index to understand the market dynamics and sentiment change.

Conclusion

Crypto FGI may look different from the original FGI indicator developed by CNN Money. However, the two indices fundamentally employ the same principle to measure investor fear and greed levels by monitoring investor emotions.

Crypto Fear & Greed Index is a helpful tool for getting to understand the market sentiments. However, it can be misleading because no tool can predict the market in its entirety. If they could, everyone would use them, and the results would be counterproductive. That’s why we emphasize the need to do your own research to supplement these indices before buying any digital asset.

What is the Crypto Fear and Greed Index?

Crypto Fear & Greed Index is a helpful tool for getting to understand the market sentiments. The index theoretically represents how much investors are willing to pay for crypto. The higher the index, the more investors are willing to pay and vice versa.

Martin Kaiser

Editor-in-Chief on Globe Funder with more than ten years of experience in personal finance, stock trading and cryptocurrency fields. Martin has a master's degree in Business Administration and a strong passion for online investing.

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