The Crypto Fear & Greed Index

June 1, 2022

Consider FGI During Crypto Dips

Image version
Text version

Prices are plunging.

And the Crypto Fear and Greed Index (FGI) has dropped to 8/100.

What does that even mean though?

Introduction

Crypto is too volatile.

There are thousands of metrics you can read up on.

That’s why FGI is a great metric to consider.

FGI measures the market sentiment of cryptocurrency at the current time.

Right now, it’s not looking too good.

Reading the Index

The Crypto Fear and Greed Index is measured from 1-100.

0-49 showing Fear

50-100 showing Greed

How Can This be Interpreted?

1 → Extreme Fear. People are Selling. This is a buying opportunity, prices decline.

100 → Extreme Greed. People are Buying. This is a selling opportunity, prices increase.


6 Metrics That The Index Includes

1. Volatility

- 25% of Index Value

- Compares volatility and max drawdowns against 30-day and 90-day average volatility and drawdown numbers.

- Higher Volatility = Fearful and Increases Final Output

2. Market momentum and volume

- 25% of the Index Value

- Measures the current momentum and volume of the Bitcoin market, against the 30-day and 90-day average.

- High volume and momentum = negative metrics and increases final index output.

3. Social media

- 15% on Index Value

- Measures the social media engagement (mentions, hashtags, interactions) across various social media sites.

- More participation = Higher Index Score

4. Surveys

- 15% of Index Value

- Measures the results of 2,000-3,000 survey participants.

- More enthusiastic survey results = Higher Index Score

5. Trends

- 10% of Index Value

- Measuring crypto search volume on Google.

- More Search Volume = Higher Index Score

6. Dominance

- 10% of the Index Value

- Measures the dominance of Bitcoin in the crypto market. Markets get greedy when Bitcoin’s dominance decreases. This happens when altcoins gain more market share.

At the end of the day, the FGI is just another metric to consider.

You can keep track of it through their Twitter, @BitcoinFear.

Knowing the market’s sentiment is important when you’re making financial decisions.

Now that you’re equipped with this, good luck on your investments!

Sources

https://time.com/nextadvisor/investing/cryptocurrency/bitcoin-crash-continues/

https://cryptopotato.com/bitcoin-fear-and-greed-index-deep-in-extreme-fear-as-btc-dumped-to-34k/

https://alternative.me/crypto/fear-and-greed-index/

https://www.forbes.com/advisor/in/investing/crypto-crash-is-now-the-time-to-buy-the-dip/https://time.com/6175370/why-bitcoin-crashing/

https://www.coindesk.com/learn/the-crypto-fear-and-greed-index-explained/

https://www.fool.com/the-ascent/cryptocurrency/articles/crypto-fear-index-shows-extreme-fear-grips-most-buyers-should-you-invest-now/

Community Highlight

Join the Smoothie Newsletter

This is a special newsletter. Every week, we deconstruct the best crypto trends and share those insights with you.

Thanks for subscribing

We will send you an email shortly
Oops! Something went wrong while submitting the form.