What is the Crypto Fear and Greed Index?

BtcTurk | Global
3 min readFeb 5, 2023

The Crypto Fear and Greed Index is a chart that scores users’ emotional approach to the current state of the cryptocurrency market. The graphic represents the two emotions of users. One is fear and the other is greed. In this article, you can find the answer to the question of what is the Crypto Fear and Greed Index.

What is the Crypto Fear and Greed Index?

The cryptocurrency ecosystem has a very dynamic structure. Today, news about the cryptocurrency industry is constantly being published. Although some of these news are positive about the cryptocurrency sector, there are also many negative news and developments that affect the sector. News flows about cryptocurrencies also affect the prices of cryptocurrencies. After positive news, rapid upward price movements can occur in cryptocurrencies. Sudden downward price movements may occur after negative news. The fact that the cryptocurrency sector has such a dynamic structure is also reflected in the emotional changes of the investors. While negative news drives investors into a state of fear and anxiety, rapid price rises in cryptocurrencies can increase users’ appetite for the sector and mobilize them to invest. Users’ overall emotional attitude towards the current state of the cryptocurrency market is measured by a chart called the Crypto Fear and Greed Index. This graph scores the users’ fear and greed status.

How Does the Crypto Fear and Greed Index Work?

The Crypto Fear and Greed Index considers 2 emotions of users. One of them is the fear of the markets, and the other is the appetite and greed towards the markets as a result of positive developments. In the index, analysis is carried out by scoring. Users’ sensitivity to the cryptocurrency market is scored between 0 and 100. Scoring between 0 and 50 represents the feeling of fear. As the score decreases, it is noticed that the fear of the users against the market increases. Scoring between 50 and 100 represents a sense of greed. As the score increases, it can be observed that users are overly interested in the cryptocurrency sector.

How Is the Crypto Fear and Greed Index Calculated?

The Crypto Fear and Greed Index is calculated by combining the results of many different data. This data includes the current price movements of the cryptocurrency market. The current price movements of cryptocurrencies with high market value, especially Bitcoin, are calculated and included in the index as data. The trading volume of the cryptocurrency market is another data added to the index. Volumes in cryptocurrencies are another factor that determines the fear or greed approach of users. Social media comments and internet searches are also important data that affect the index. Users’ searches and comments about Bitcoin and cryptocurrencies on social media or on the internet direct the scoring in the index. Bitcoin dominance data also affects the Crypto Fear and Greed Index. When Bitcoin’s market dominance rises compared to other cryptocurrencies, it is understood that users turn to Bitcoin from other cryptocurrencies and are in a panic. As a result of all these developments, the Crypto Fear and Greed Index currently takes a value between 0–100.

--

--