Fear and Greed Index

What is the Bitcoin Fear and Greed Index?

The Bitcoin Fear and Greed Index is a multifactor sentiment index that gauges the mood of the crypto markets. The index ranges from 0 to 100, where a score near 0 indicates extreme fear (seen in a bear market) and a score near 100 indicates extreme greed (seen in a bull market).

The indicator is used to gauge the mood of the crypto markets for sentiment analysis, one of the four main analyses in crypto besides fundamental, technical (chart-based) and on-chain.

Interpretation

Here is a brief summary of the index score and its meaning.

0 to 25: Extreme Fear, meaning the mood of the market is very bearish.
25 to 45: Fear, slightly more bullish but still in a predominant bearish mood.
45 to 55: Neutral, often seen during an inflection (turning point) between a bear and bull market.
55 to 80: Greed, an overall bullish mood, but users take some precautions.
80 to 100: Extreme Greed; markets are at their highest bullish level at this stage.

Common Tricks

It is during an extreme greed phase that the market tops, and during the extreme fear phase, the market bottoms. However, the top and the bottom could be as long as some hours or even some months.

During the extreme greed phase, whales and large investors sell their holdings and repurchase them during the extreme fear phase.