On March 21, the Fear and Greed index in the cryptocurrency market reached 68 points for the first time in 16 months. The last time the indicator exceeded this value was on November 16, 2021, after Bitcoin set an all-time high at $69,000. On that day, the index was at around 71 points.
The Fear and Greed Index is a sentiment indicator that shows which of these emotions prevails in the crypto market. It has a range from 0 to 100. A low mark indicates fear, which leads to a sale of assets and a fall in the crypto market. A high score indicates that people tend to buy digital assets.
The index value in the range from 0 to 24 means that the market is dominated by “extreme fear”, the range from 25 to 49 indicates “fear”. A level of 51 to 74 indicates “greed”, while a score of 75 to 100 indicates “extreme greed”. Marks close to 50 points reflect a neutral state.
To calculate the index, parameters such as volatility, market volume and dynamics, social media sentiment (Bitcoin mentions and reactions to them), asset dominance in the market, and analysis of search queries in Google are used.
The rise in the price of bitcoin at the beginning of 2023 helped the crypto market overcome the state of “fear” for the first time since April 5, 2022. On January 15, the index hit 52, marking neutral sentiment for digital currencies after 9 months of “fear.” Last year, the sentiment indicator dropped to a low of 6 points (June 18), and until the beginning of this year fluctuated between 15 and 40 points.