The Fear and Greed Index (FGI) is a tool that measures sentiment in the cryptocurrency market. Originally developed for the stock market, this indicator helps traders assess the “temperature” of investors: the lower the score, the more panic-driven the market; the higher the score — the greater the appetite for buying.
How Does the FGI Work?
FGI is measured on a scale from 0 to 100:
- 0–20: Extreme Fear — Assets are oversold, the risk of further decline is reduced, but panic prevents the market from stabilizing.
- 21–40: Fear — concerns about downturn remain.
- 41–60: Neutral — investors have not yet decided on the direction of the market.
- 61–80: Greed — the market is overbought, but there is still potential for growth.
- 81–100: Extreme Greed — assets are heavily overbought, price may drop sharply.
The index helps identify optimal times to buy or sell assets, as well as predict market reversals and short-term trends.
When to Use the FGI?
FGI is especially useful for:
- Traders to assess short-term volatility.
- Investors, to determine more favorable entry and exit points.
However, the index is less useful for long-term strategies - it does not account for fundamental factors like project roadmaps or interest of institutional investors.
How to Track the FGI?
You can find FGI data on platforms such as CoinMarketCap, CoinStats, Alternative.me, etc. hese services calculate the index using several key indicators:
- Market Volatility: Tracks price swings over the past weeks and months. Sharp drops indicate fear; steady growth builds investor confidence.
- Trading Volumes and Market Momentum: High trading volumes and ising prices increase greed. A decline in activity is usually accompanied by fear in the market.
- Social Signals: Analyze discussions on platforms like Twitter or Reddit to see how actively investors are talking about cryptocurrencies. High engagement can indicate trend formation or FOMO.
- Market Surveys: Aggregating opinions from traders and investors on the current state of the market reveal general sentiment, from confidence to anxiety.
- Bitcoin Dominance: An increase is usually associated with increased fear in the market. Investors fleeing to a safe haven asset can signal panic, while a decrease indicates greed and interest in altcoins.
- Search Trends: Google Trends analysis shows the popularity of queries like "buy bitcoin" or "how to short bitcoin", offering insight into investor mood and expectations.
Each service may calculate the index differently, so values can vary. For a balanced view, it’s best to compare data across multiple sources.
Summary
The Fear and Greed Index is a powerful tool for understanding crypto market sentiment. However, to make informed investment decisions, it is important to conduct a detailed analysis of each project — including its strategy, tokenomics, and long-term vision.
Spintria provides all essential project information openly.
Check out Spintria! Full details including roadmap and tokenomics are available on our website.
*We do not provide investment advice. All information in this article is for educational purposes only. Always assess risks carefully before making financial decision.