Unlocking the Crypto Fear & Greed Index: What Does ‘Greed’ at 71 Crucially Mean?

Key Points

1. The Crypto Fear & Greed Index ranges from 0 (Extreme Fear) to 100 (Extreme Greed), with 71 indicating investor optimism and high-risk appetite.

2. The index is calculated using six factors: volatility (25%), market momentum/volume (25%), social media sentiment (15%), surveys (15%, currently paused), Bitcoin dominance (10%), and Google Trends (10%).

3. A high greed score suggests prices may be driven by speculation, potentially leading to sharp pullbacks, while extreme fear can signal buying opportunities.

4. The index is a sentiment tool, not a predictive model, and should be used alongside other market analysis methods.

5. Challenges include its reliance on real-time data and the absence of paused survey components, requiring investors to supplement it with broader market insights.