What is the Fear and Greed Index?
What is the Fear and Greed Index?
In investing, emotion has a huge influence on investment behavior. especially fear and greed For example, in the event that investors are in a state of fear, they will promptly sell off the market. Analysts therefore see the importance of measuring investor sentiment with the use of indices because, if they are aware of these values, they can be used to analyze their investments when positive and negative market situations arise. And one of the indexes used to measure investors' fear and greed is the fear and greed index that we will talk about in this article.
The fear and greed index is not only a tool used to look at trends in the market to see how much demand is in the market right now, it is also a tool for investment decision making. investor Because they can follow their own investment plans as well.
🔸 fear and greed index valuation
If the fear and greed index is 0 - 10, then market participants are very scared. causing high sales
But if the fear and greed index is 100, it means that the market is buying a high rate because investors are very greedy.
🔸How is the fear and greed index calculated?
The fear and greed index is a combination of factors. Used in the calculations include:
- The volatility and maximum drawdown of the Bitcoin price compared to the previous 30 and 90 volatility in a 25% calculation ratio.
- Momentum and volume of trading activity Compared to the average of the past 30 and 90 years in a 25% calculation.
- The speed and response volume of various crypto coin hashtags on Twitter. in the ratio of 15% calculation
- Use the figure of the Market Cap. ratio of Bitcoin and Altcoin in the calculation ratio of 10%.
- Keywords to search for Bitcoin from Google with a calculated ratio of 10%
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