Staying ahead of the game is very important. It is a skill to know what the crypto market will do next in order to make the most profit. One handy tool that can help one to navigate the market is the Fear & Greed Index.
What is the Fear & Greed Index?
The Fear & Greed Index gives investors an indication of the daily market sentiments. It tells you if there is more fear or greed in the market on a specific day. This is measured on a scale of 0 – 100.
The Index takes into consideration volatility, trends, market volume, social media, dominance, and other factors to establish what the crypto market sentiment is on that day.
At the moment, the Index is only applicable to Bitcoin and not altcoins.
Herewith the model used to measure the market sentiment:
- Volatility accounts for 25%
- Market Momentum/Volume accounts for 25%
- Social Media accounts for 15%
- Surveys account for 15%. Click here to check out recent survey results.
- Dominance accounts for 10%
- Trends account for 10%
What does it mean?
Some crypto traders can get quite emotional when the market is making big moves – up or down. The crypto market is known to be extremely volatile and this can cause traders to FOMO (Fear Of Missing Out).
For this reason, the Fear & Greed Index gives an indication if traders are fearful or greedy on a specific day. Extreme fear points towards a negative market sentiment whilst extreme greed points towards a positive market sentiment.
Extreme fear is an indication that investors are concerned about the market and the chart will be in red. For the cool and collected investor, this is the ideal buying opportunity. Should the chart go into the green area it shows that the market is greedy and is a good time to sell.
You can check out the Fear & Greed Index at any time – click here.
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Another way to stay in the loop of what is happening in the crypto market is to subscribe to the Bitmart Trading Floor Subscription Service. For only R500 per month, you will receive spot notifications of great trade opportunities, buy and sell signals and market analysis.
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