Fear and Greed Index
Candlefocus EditorThe Fear and Greed Index, designed by CNNMoney and initially released in 2017, is an index that measures investors' emotional responses to stock market performance and news. It grades the collective sentiment of investors from a scale of 0 to 100, using seven different indicators, such as stock and bond performance, stock and ETF volatility, and put/call options, to measure the current level of fear and greed among investors. A score of 0 suggests extreme fear, while a score of 100 indicates excessive greed in the markets.
Alternative.me offers a crypto fear and greed index, rather than just a stock market index. The crypto fear and greed index follows the same principle as the stock market index, measuring investor sentiment on digital asset markets. The index also looks at five indicators such as volatility, liquidity, market momentum, social media sentiment, and volume of mixing services in order to gauge the level of fear and greed in cryptocurrency markets.
As the name implies, the fear and greed index is a comprehensive measure of the emotions of investors. It’s important that investors take the risk of their investments seriously, and the fear and greed index can help them make more informed decisions. The index’s base score of 50 serves as a reminder that investors should not become overly greedy or fearful. When the index moves either way, it can provide investors with insight into a potentially better course of action.