{"id":37951,"date":"2023-12-22T17:00:00","date_gmt":"2023-12-22T15:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=37951"},"modified":"2025-08-29T23:47:16","modified_gmt":"2025-08-29T20:47:16","slug":"what-is-cryptos-fear-and-greed-index","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/what-is-cryptos-fear-and-greed-index\/","title":{"rendered":"What is crypto\u2019s Fear and Greed Index?"},"content":{"rendered":"<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">How did the Fear and Greed Index emerge?<\/h2>\n<p>The Crypto Fear &amp; Greed Index is a numerical gauge of sentiment in the crypto market. It runs on a 0\u2013100 scale, where 0 means \u201cExtreme Fear\u201d and 100 \u201cExtreme Greed\u201d.<\/p>\n<p>The index was developed by the Alternative service as a crypto-optimised version of the traditional Fear &amp; Greed Index from <a href=\"https:\/\/money.cnn.com\/data\/fear-and-greed\/\" target=\"_blank\" rel=\"noopener\" title=\"\">CNNMoney<\/a>.<\/p>\n<p>Both aim to capture the two most powerful emotions in markets. Participants often act irrationally: they buy out of greed, fearing to miss out on gains, and sell into declines out of fear of losing everything.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">How is the index calculated?<\/h2>\n<p>According to Alternative\u2019s current description, the Fear &amp; Greed Index is calculated solely from bitcoin market data. No other cryptocurrencies influence the reading. The value on the scale <a href=\"https:\/\/alternative.me\/crypto\/fear-and-greed-index\/\" target=\"_blank\" rel=\"noopener\" title=\"\">is updated<\/a> daily.<\/p>\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-eu.googleusercontent.com\/X6vgh36afxLnnxWuOW_Xv0p7xnQbgJO4sX90rNBe4-7mLfNf7nPcBOIFr9mn_7T73ZLDPE-VgZxMLE_EdSYN2axzhwCfT-c-woOfqCVayNPJEOqgGH52dBvTRvqQatIJoosRgepy9RkTFDyczO_Iqlo\" alt=\"What is the crypto Fear and Greed Index?\"\/><figcaption class=\"wp-element-caption\">Fear and Greed Index as of 22.12.2023. Data: Alternative.<\/figcaption><\/figure>\n<p>The developers identify five factors used in the calculation.<\/p>\n<p><strong>Volatility.<\/strong> Like the other inputs, it is measured daily, using 30- and 90-day averages. The creators argue that an unusual rise in volatility signals fear.<\/p>\n<p><strong>Market momentum and trading volumes.<\/strong> This combines bitcoin\u2019s price dynamics with buy and sell flows, computed from 30- and 90-day averages. For example, high volumes in a rising market point to heightened greed. These inputs carry the same weight as volatility.<\/p>\n<p><strong>Social networks.<\/strong> The index tracks sentiment on the social network X via unnamed hashtags. The developers believe that high mention counts and rapid user engagement around certain topics indicate greed.<\/p>\n<p><strong>Bitcoin dominance.<\/strong> This is bitcoin\u2019s share of total crypto market capitalisation. Alternative\u2019s analysts reckon that rising dominance points to fear, as users shift liquidity into bitcoin for its perceived reliability. A falling share suggests growing risk appetite and greed as users look for opportunities in altcoins.<\/p>\n<p><strong>Google queries.<\/strong> The team analyses popular bitcoin-related searches via Google Trends. For instance, more searches for \u201cbitcoin price manipulation\u201d point to \u201cfear\u201d, while a rise in \u201chow to buy bitcoin\u201d suggests greed. In the index, this carries the same weight as bitcoin dominance.<\/p>\n<p>Early versions of the index included user surveys, but that source is no longer used in the calculations.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">What sentiments does the scale show?<\/h2>\n<p>The creators split the scale into five \u201cemotional\u201d zones with the following ranges:<\/p>\n<ul class=\"wp-block-list\">\n<li>\u201cExtreme Fear\u201d corresponds to 0\u201325. At this level, the market is thought to be in a phase where \u201cweak hands\u201d sell in panic. Analysts consider this the most favourable time to buy bitcoin;<\/li>\n<li>\u201cFear\u201d covers 26\u201346, where bearish sentiment is presumed to dominate;<\/li>\n<li>\u201cNeutral\u201d spans 47\u201354 and offers no useful signal;<\/li>\n<li>\u201cGreed\u201d corresponds to 55\u201375, indicating predominantly bullish sentiment;<\/li>\n<li>\u201cExtreme Greed\u201d covers 76\u2013100 and may suggest that <span data-descr=\"Fear of missing out\" class=\"old_tooltip\">FOMO<\/span> dominates the market.<\/li>\n<\/ul>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">When should you use the index?<br \/><\/h2>\n<p>The index\u2019s logic boils down to a line by billionaire Warren Buffett: \u201cBuy when everyone is selling, sell when everyone is buying.\u201d The fear-and-greed scale helps reveal the bitcoin market\u2019s emotional state\u2014and, by extension, that of the broader crypto market.<\/p>\n<p>The index is suited to tracking long-term trends rather than active trading. However, the \u201cExtreme Fear\u201d and \u201cExtreme Greed\u201d zones can help optimise strategies such as <a href=\"https:\/\/forklog.com\/en\/news\/what-is-dollar-cost-averaging\">dollar-cost averaging<\/a> (Dollar-cost averaging, DCA). The idea is to buy in parts at very low readings and sell at the opposite extreme.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Which factors shape the Fear and Greed Index\u2014and how to use it in market analysis.<\/p>\n","protected":false},"author":1,"featured_media":37952,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"1","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[2113],"tags":[18,1384],"class_list":["post-37951","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptorium","tag-bitcoin","tag-fear-index"],"aioseo_notices":[],"amp_enabled":true,"views":"247","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=37951"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37951\/revisions"}],"predecessor-version":[{"id":37953,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37951\/revisions\/37953"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/37952"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=37951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=37951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=37951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}