The crypto fear and greed index – and how it can signify a bubble or a huge buying opportunity
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I stumbled across an intuitive website that monitors many sentiments from articles and charts them. https://alternative.me/crypto/fear-and-greed-index/ As you can see, last week, when prices were at an ATH, everyone was euphoric – thus the "extreme greed". Everyone is in euphoria mode in this extreme greed. It is human nature that makes it so that when the dominos fall, which people speculate is the Biden tax news or margins getting liquidated in this recent correction, trigger the start of a correction, it causes a cascade effect of panic selling and shaking out the weak hands. Then people start to have a negative sentiment about the price of crypto, thus the "fear". Now let's see the index over time. and overlay it on top of BTC price. Honestly, it's insane how crazy the sentiment changes as does the price. We've heard of the good ol' quote from Buffett, probably too many times; "Be fearful when others are greedy and be greedy when others are fearful". Skepticism is an investor's best friend, and doing the opposite of the norm is a surprisingly successful strat. That being said, I'm glad I found this useful tool and I want to let you guys know. Good luck and may profits be with you! submitted by /u/Iiau_ |
