The Fear and Greed Index is another tool many technical analysts and cryptocurrency traders use. Some of these traders will use the Fear and Greed Index for buying and selling crypto at certain times. If you want to use this Index to your advantage, check out this site: https://alternative.me/crypto/fear-and-greed-index/. This index will give you daily readings from Extreme Fear to Extreme Greed (and everything in between). Let’s get into some more details about the index right now!
The picture shown below will show the Fear and Greed Index from today:
Here is a perfect picture of what is happening in the crypto realm today. As you can see, the current numerical value is 22, resulting in Extreme Fear! The current crypto space sentiment (based upon extreme fear) is that most are still scared of the crypto markets. As the price rises and more traders start to feel comfortable with crypto again, you still begin to see the numerical value of the index go up, and the sentiment slowly switches from Extreme Fear to Extreme Greed (usually over months). Sometimes the index will stay in Fear for months and sometimes remain in Greed for months. During Extreme Fear, the crypto market is going down and not making many moves up. There is Extreme Greed and not many sizeable downward price movements when the crypto markets are going up. Some traders will use this concept within their trading regimen. They “buy the fear, sell the greed.” People like to buy the fear because it sometimes points to a market bottom and vice versa. This is not guaranteed and is not financial advice. Any trading is done at your discretion. Many traders (such as me) have used the Fear and Greed Index to my buying and selling advantage!
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Written by: Matt Senn