Crypto Fear & Greed Index

Introduce

The Fear and Greed Index is provided by the German software platform Alternative Me, and its official website address is https://alternative.me/crypto/fear-and-greed-index/ .
The Fear Greed Index can be used to measure the emotions of investors in the market, and the two most common emotions that appear on investors are "greed" and "fear".
When investors are in a state of fear towards the financial market, prices usually fall below the usual level. However, when investors are in a state of greed towards the financial market, prices are prone to skyrocketing.

Latest Index

History Indexes

Level Definitions

The Fear and Greed Index measures current market sentiment with indices ranging from 0 to 100. The closer the value is to 0, the more fearful the investor sentiment in the market is. And as the value approaches 100, it indicates that the investor sentiment in the market is more greedy.
Its specific composition is as follows

Data Sources

Let’s list all the different factors we’re including in the current index:

Volatility (25%)

We’re measuring the current volatility and max. drawdowns of bitcoin and compare it with the corresponding average values of the last 30 days and 90 days. We argue that an unusual rise in volatility is a sign of a fearful market.

Market Momentum/Volume (25%)

Also, we’re measuring the current volume and market momentum (again in comparison with the last 30/90 day average values) and put those two values together. Generally, when we see high buying volumes in a positive market on a daily basis, we conclude that the market acts overly greedy / too bullish.

Social Media (15%)

While our reddit sentiment analysis is still not in the live index (we’re still experimenting some market-related key words in the text processing algorithm), our twitter analysis is running. There, we gather and count posts on various hashtags for each coin (publicly, we show only those for Bitcoin) and check how fast and how many interactions they receive in certain time frames). A unusual high interaction rate results in a grown public interest in the coin and in our eyes, corresponds to a greedy market behaviour.

Surveys (15%)

Together with strawpoll.com , quite a large public polling platform, we’re conducting weekly crypto polls and ask people how they see the market. Usually, we’re seeing 2,000 - 3,000 votes on each poll, so we do get a picture of the sentiment of a group of crypto investors. We don’t give those results too much attention, but it was quite useful in the beginning of our studies.

Dominance (10%)

The dominance of a coin resembles the market cap share of the whole crypto market. Especially for Bitcoin, we think that a rise in Bitcoin dominance is caused by a fear of (and thus a reduction of) too speculative alt-coin investments, since Bitcoin is becoming more and more the safe haven of crypto. On the other side, when Bitcoin dominance shrinks, people are getting more greedy by investing in more risky alt-coins, dreaming of their chance in next big bull run. Anyhow, analyzing the dominance for a coin other than Bitcoin, you could argue the other way round, since more interest in an alt-coin may conclude a bullish/greedy behaviour for that specific coin.

Trends (10%)

We pull Google Trends data for various Bitcoin related search queries and crunch those numbers, especially the change of search volumes as well as recommended other currently popular searches. For example, if you check Google Trends for "Bitcoin", you can’t get much information from the search volume. You can see that the query "bitcoin price manipulation" in the box of related search queries. This is clearly a sign in the market, and we use that for our index.