Recently, the price of the currency has begun to plummet, and the sentiment of investors will be affected, and this sentiment is often reflected in the price of the currency. To quantify the impact of this sentiment on the market, the “Bitcoin Fear Index” was born.
What is the Bitcoin Fear Index? The panic index is a simple index that analyzes people’s emotions through different sources and data every day. You can check it at alternative.me/crypto/.
u6HtZWLUwmwe5vgQee8o7xDTGkaQsz1Pkoyjl9LN.pngThe panic index is generally based on currency prices, trading volume, social media, surveys, the proportion of Bitcoin market value (the higher the proportion of btc, the more panic investors buy btc, the more panic the market is), and the search trend (Google’s search trends about Bitcoin, More people searching means high popularity, less searching means panic or no one enters the market) These dimensions are calculated. The level of the panic index can be used as a reference for investment to a certain extent. Because, the behavior of the cryptocurrency market is very emotional. When the market goes up, people tend to become greedy and worry about missing out (FOMO: Fear of missing out, remember the recent hot fund + MLM game FOMO 3D? FOMO means worry about missing out). Moreover, when the market falls, it is easy for people to sell their assets irrationally. With this panic index, it can provide a certain reference and predict the direction of the market to a certain extent.
There are two assumptions here:
Extreme panic can be a sign that investors are very worried, which can serve as a buying opportunity.
When investors become extremely greedy, it means the market may be at the end of a bull market.
Because, we analyze the sentiment of the Bitcoin market and reflect this data into a simple graph from 0 to 100, where 0 represents extreme panic and 100 represents extreme greed.