The fear and greed index for #Bitcoin is an interesting indicator to measure market sentiment at any given time. In this video we take a look at the fear and greed index, and compare current trends with prior trends.
Fear and Greed Index:
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Disclaimer: The information presented within this video is NOT financial advice.
Hey everyone and thanks for jumping back Into the cryptiverse today we’re going To talk about Bitcoin and we’re going to Be looking into the fear and greed index If you guys like the content make sure You subscribe to the channel give the Video a thumbs up and also check out the Sale on into the cryptiverse premium at Into the cryptiverse.com let’s go ahead And jump in so I’m sure many of you are Familiar with the fear and greet index It’s a market sentiment analysis tool uh You can find it at this website right Here I’ll link that in the description Below if you’re unfamiliar with it but Essentially what it does is it helps Show you whether the market you know Market participants are feeling greedy Or they’re feeling fearful or if it’s Somewhere in between and you can see Over the last month it’s it’s basically Been between neutral and greed so a Month ago it was more or less neutral Recently it’s been somewhat greedy right Last week yesterday and today it’s it’s Leaning in sort of the the greed phase Whereas last month it was neutral and of Course a few months before that it was Fear and extreme fear and so the Sentiment meant in the cryptoverse Certain certainly Ebbs and flows right We go from greed to fear to extreme Greed to extreme fear and and we just Really go back and forth back and forth
But we also know that if you look at any Individual value for the fear and greed Index it does not always tell you Um you know It might not always tell you what what Exactly you’re looking for because it Sometimes can be at extreme levels of Greed or extreme levels of fear for a Long period of time to show you what I’m Talking about if we were to go look at The fear and greed index here you can See that in 2020 the fear and greed Index went basically to like 95 when Bitcoin was at like 19 and a half K Right so the fear and grid index was in The upper 90s even though the price Continued to go up you know three more Than three times higher than that over The next few months So I’m not sure that it’s necessarily The best indicator to use say like a Single data point for but It is interesting in the sense that we Might be able to apply moving average to It now I should say there’s always an Exception to the rule I mean yes it Would not have worked out here at you Know at a fear and grade index of 95 Um you know to really offload all your All your Bitcoin but had you done so out Of fear and green index of 95 in the Summer of 2019 it actually would have Worked out quite well so I mean of Course there’s different ways that you
Can look at the data uh but I do think One one potentially interesting way to Look at it is to apply a moving average To it okay because in any given month Right we can of course go to extreme Levels of fear extreme levels of greed It all just depends on what’s happening Within the cryptiverse and and price Action mainly but if you were to apply a Moving average to it so let’s look at The raw values apply like a 30-day SMA And while in 2019 we did go to say like A fear and greed of 95 when you look at A 30-day estimate is sort of topped out In the 70s whereas a 30-day SMA of the Few ingredient index back in 2021 topped Out in the 90 fees so there’s a Difference between going there for a Very short period of time and then Coming back down in sort of like a Choppy year like we had in 2019 and I Was like we had in 2015 and probably 2023 and then going there and spending a Sustained amount of time there like we Did in 2021 like we did in 2017 of Course this metric doesn’t go back to 2017 but I’m sure that if it did it Would have been flashing extreme levels Of greed and in 2013 as well So perhaps applying a moving average is A is a useful way to look at this one Interesting thing when you when you look At the fear and greed index is that in 2018 we sort of saw it hit a low here
Then price bounced up a little bit and Then price came back down but while Price was coming back down the market Wasn’t as fearful and sort of some type Of Market sentiment Divergence I suppose And then we saw this rally in 2019 Something similar has has actually Played out over here right we saw a low Here in June and we called for a lower Low in in November Um we actually had video about it you Know right before right before November Happened because I I think a lot of People assume that June’s the bottom and This is what happened in Q3 2018 as well But we often do see things pushed lower By the end of the year and it did but What’s interesting is that it put in a Higher low on the sentiment analysis Right so on the fear and greed index the We put in a higher low And then of course we we’ve seen a Pretty nice rally here in 2023 not that Dissimilar from what we saw in 2015 not That it’s similar from what we saw in in 2019 as well it’s also an interesting to Note though that there’s a a fade in Terms of like the phase of the cycle I Would still argue that we’re more Similar to 2019 and 2015 than we are to Say like 2020 or 2021 or 2016 and 2017. I think this is sort of the the long Recovery year where where we sort of Just chop around and I mean again like
We saw this happen in 2019 where the Fear and green index went went up for a While and then we came back down note That when we came back down over here in 2020 the fear and green index actually Put in a lower low at least on the 30-day SMA and I believe it also put in A lower low when you just look at the Raw data as well I believe this came Down to like eight or something yeah Fear and green index of eight whereas in December of 2018 the lowest it really Ever went was around nine so it actually Did go slightly lower and it went there Pretty quickly because I mean it dropped From in the 60s right it essentially Dropped from the 60s all the way down to Around a few ingredient index of eight Within just the span of a few weeks so Sentiment can change very quickly Within the cryptiverse that’s something We you know we should all of course be Very familiar with Um just note that that it of course it Will likely continue to change back and Forth as we continue to navigate this Year I also think another way to look at It is with a 90-day EMA I think the 90-day EMA is an interesting way to look At it because you know going into 2021 When we were at 20K and the fear and Greed index was already at like you know 95 on the raw data if you actually look At like a 90-day EMA of it it would have
Only been in the 70s where again It Ultimately went all the way up into the 80 you know 84 level in this Distribution phase over here so I think The fear and green index is a great tool To use I do think that applying some Type of a moving average to it might Help clean up the data a little bit of Course it does introduce an element of a Lagging indicator Right Moving averages By definition are of course going to be A lagging indicator but by applying a Moving average it can help tell you if It’s you know if if this if the that Type of symptom is being sustained for a Long period of time and if you’re seeing It sustained for several months then we Must understand that the market Conditions are getting extremely risky Right if it’s if it’s sustained for for Very long periods of time anyways Hopefully you guys like the content make Sure you subscribe the channel if you’re Not subscribed and we do the sale and Into the crypto versus premium at into The cryptoverse.com and I’ll see you Guys next time bye