Unveiling the Crypto Fear & Greed Index: Why 70 Signals Strong Market Greed

Key Points

1. The Crypto Fear & Greed Index, developed by Alternative.me, measures market sentiment on a scale from 0 (Extreme Fear) to 100 (Extreme Greed).

2. A score of 70 suggests the market is in a 'Greed' phase, often associated with irrational exuberance and strong buying pressure, but also potential overheating.

3. The index is calculated using factors like volatility (25%), market momentum/volume (25%), social media activity (15%), surveys (15%, currently paused), and Bitcoin dominance (10%).

4. Bitcoin's price movements significantly influence the overall index, as it sets the tone for the broader cryptocurrency market.

5. Investors are advised to exercise caution, avoid FOMO-driven decisions, and base actions on personal risk tolerance and strategy rather than the index alone.