Markets are driven by two primal emotions: Fear and Greed. The crypto market, due to its volatility and retail participation, experiences these emotions at extremes unseen in traditional finance.
How the Index is Calculated
- ✓Volatility (25%): Unusual volatility drops the score to fear.
- ✓Market Momentum/Volume (25%): High buying volume spikes greed.
- ✓Social Media (15%): Twitter sentiment analysis.
- ✓Surveys (15%), Dominance (10%), and Google Trends (10%) round out the calculation.
The Trading Strategy
Extreme Fear (0-20): The market is panicking, liquidations are cascading, and everyone is declaring crypto dead. This is the ultimate contrarian buy signal. DCA aggressively in this zone.
Extreme Greed (80-100): Mainstream media is writing articles about crypto millionaires, and your barber asks you what altcoin to buy. This is the ultimate danger zone. It's time to scale out and take profits.