Klever
  • Home
  • Global
  • Exchange
  • Wallet
  • Education
  • NFTs
  • Announcements
  • Opinions
  • Marketcap
No Result
View All Result
  • Login
  • Register
Klever News
  • Home
  • Global
  • Exchange
  • Wallet
  • Education
  • NFTs
  • Announcements
  • Opinions
  • Marketcap
No Result
View All Result
Klever News
Home Global
Fear and Greed Index

Fear & Greed Index: How does it help you to trade better?

by James Enajite
February 4, 2022
in Global
Reading Time: 4 mins read
3k
A A
0
Share on FacebookShare on Twitter

A highly popular index (Fear and Greed index) has recently been considered by most traders as a leading indicator of how the market is likely to swing, as a result of traders’ psychological decisions.

What is the Fear & Greed Index?

You might also like

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

February 22, 2023
7.5k
Klever Wallet: A Secure Solution for Managing Your Crypto Assets

Klever Wallet: A Secure Solution for Managing Your Crypto Assets

February 14, 2023
7.5k

The Fear and Greed Index, developed by CNNMoney, is used to gauge whether investors are too bullish or bearish on any market. The index ranges from 0 (extreme fear) to 100 (extreme greed). When applied to the crypto market, the Fear and Greed Index serves as a barometer for the market being fairly priced and trading in the right direction by observing investors’ emotions. Contrary to popular belief, this index is viewed as a contrarian index by most smart and analytical traders.

As a result, when investors become afraid, they sell crypto holdings in their portfolio, which drives prices down to the point where they may be below their intrinsic value. The opposite is also true when investors are greedy. Accordingly, fear is a buy indicator for the Index, and greed is a sell indicator.

Understanding the Fear & Greed Index

The basic understanding of the Fear and Greed Index is commonly used by market traders to time the entry into the market. Whereas the Index is more notable as less of an investment research tool and more of a market-timing tool. Subsequently, this has given certain individuals the status of  an authority in market analysis like  Warren Buffet who once said, “Be fearful when others are greedy, and greedy when others are fearful.”

The crypto market behavior is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in the irrational reaction of seeing red numbers. An understanding of the Fear and Greed Index will apparently try to save traders from their own emotional overreactions. Based on these two simple assumptions:

  1. Extreme fear can be a sign that investors are too worried about the state of the market. Which could be a buying opportunity.
  2. When Investors are getting too greedy by throwing in more money into an overbought market, that means the market is due for a correction.

Certain data sources are used to produce the Fear & Greed Index which include but are not limited to the following:

Volatility

The data is used for measuring the current volatility and maximum drawdowns of crypto (in this case Bitcoin) and comparing it with the corresponding average values of the last 30 days and 90 days. The possibility of an unusual rise in volatility is a sign of a fearful market.

Market Momentum/Volume 

There is also measuring the current volume and market momentum (which would involve a comparison with the last 30/90 day average values) and putting those two values together. It is often opinionated that 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 

There is also the aspect of what the people are saying on the streets of social media which could be factored in a virtual perspective similar to what is obtainable in the street of traditional markets, such that data gathered and the count on various posts using various hashtags for each coin and check how fast and how many interactions they receive in certain time frames. An unusually high interaction rate results in a grown public interest for that particular coin and oftentimes corresponds to greedy market behavior.

In conclusion, we would like to encourage traders to always carry out due diligence and proper research on market trends before investing and executing trades in order to avoid excess losses from traders’ inability to carry out their own proper research. The Klever community and the team is always willing to educate new users and prospective investors on the various analysis for trading to minimize loss. 

Klever, making trading simple.

Tags: fearfear and greed indexgreed
Advertisement Advertisement
Previous Post

Can anything become an NFT?

Next Post

Bitcoin at this moment in time

James Enajite

James Enajite

A passionate lover of crypto and mankind with an active mind to create content to educate everyone within my sphere of influence. An entrepreneur with an open heart to accommodate young aspiring individuals to achieve their best in a global space.

Related Stories

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

by Klever
February 22, 2023
0
7.5k

We are excited to announce that Klever has recently joined the Web3 Domain Alliance, a group dedicated to promoting the...

Klever Wallet: A Secure Solution for Managing Your Crypto Assets

Klever Wallet: A Secure Solution for Managing Your Crypto Assets

by Isabela Bellumat
February 14, 2023
0
7.5k

With so many options available, it can be difficult to determine which wallet is the best choice for your digital...

The Rise of Decentralized Autonomous Organizations: Transforming the Future of Business and Society

The Rise of Decentralized Autonomous Organizations: Transforming the Future of Business and Society

by Warren Manuel
February 10, 2023
0
7.3k

Imagine a world where businesses and organizations operate with complete transparency, security, and autonomy. A world where intermediaries and central...

Revolutionizing Investment: Can AI be Your Next Financial Advisor?

Revolutionizing Investment: Can AI be Your Next Financial Advisor?

by Warren Manuel
February 9, 2023
0
7.3k

Investment and financial management have come a long way in the digital age. With the advent of Artificial Intelligence (AI),...

Next Post
Bitcoin right now

Bitcoin at this moment in time

Klever Weekly Roundup – February 04

Download Klever Wallet Download Klever Wallet Download Klever Wallet
ADVERTISEMENT

Recommended

Ethereum

Coin of the Week: Ethereum (ETH)

November 14, 2021
7.5k
Tron (TRX)

Coin of the Week: Tron (TRX)

May 19, 2022
7.5k

Popular Story

  • Stand a chance to win your share of 10,000 KLV

    Stand a chance to win your share of 10,000 KLV

    8376 shares
    Share 3350 Tweet 2094
  • Test drive Klever Wallet, K5 and Win 1000 KLV & 1 KFI

    7041 shares
    Share 2816 Tweet 1760
  • Bitcoin battles back from record losses to $21,000

    5915 shares
    Share 2366 Tweet 1479
  • Klever showcases its blockchain ecosystem on a Time Square billboard

    5360 shares
    Share 2144 Tweet 1340
  • K5 adds new blockchain and KleverSafe support in the latest Android version

    5074 shares
    Share 2030 Tweet 1269

Follow us on Twitter

Klever News

Join the Klever community
Growing together we are stronger.
Be sure to follow us on social media to stay up to date.

Categories

  • Announcements
  • Coin of the Week
  • Education
  • Exchange
  • Games
  • Global
  • Hardware Wallet
  • Market Updates
  • NFTs
  • Opinions
  • Sponsored
  • Wallet
Download Klever Wallet Download Klever Wallet Download Klever Wallet
ADVERTISEMENT

Recent News

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

Klever joins Web3 Domain Alliance to advance blockchain naming ecosystem

February 22, 2023
Klever Wallet: A Secure Solution for Managing Your Crypto Assets

Klever Wallet: A Secure Solution for Managing Your Crypto Assets

February 14, 2023
  • Sponsored Content
  • Advertise
  • Contact Us
  • RSS Feed

© 2022 Klever News - Premium Crypto news & insights by Klever Finance.

  • Login
  • Sign Up
No Result
View All Result
  • Home
  • Global
  • Exchange
  • Wallet
  • Education
  • NFTs
  • Announcements
  • Opinions
  • Marketcap

Welcome Back!

Sign In with Google
OR

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Sign Up with Google
OR

Fill the forms below to register

*By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
-
00:00
00:00

Queue

Update Required Flash plugin
-
00:00
00:00
Go to mobile version