The Fear & Greed Index for the crypto markets, which aggregates investor sentiment towards the industry, has tipped to ‘Extreme Fear’ for the first time since the end of last month.
Despite the crypto markets shedding more than $20 billion over the last two days, market sentiment analysis is pointing towards a potential time to invest. While most investors see the falling price of bitcoin and altcoins as an indicator to start worrying, the Fear & Greed Index poses a different perspective by analyzing investor emotion in addition to market behavior.
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 overreations.
The index says that ‘Extreme Fear’ can be a sign that investors are “too worried,” which could represent a potential buying opportunity. Likewise, when investors get greedy and the index flips to ‘Extreme Greed,’ it can indicate that the market is due for a correction.
The Fear & Greed index pulls data from market volatility, volume and dominance, in addition to assessing social media and survey responses.