Why Investors Should Watch the Fear and Greed Index?

Krutika Adani

What is Fear and Greed Index?

  • The Fear and Greed Index is a sentiment tracker that gauges whether investors are feeling fearful (bearish) or greedy (bullish) in the market.

How It Works

The index ranges from 0 to 100:

  • 0-24: Extreme Fear (Market Panic)

  • 25-49: Fear (Cautious Market)

  • 50-74: Greed (Growing Confidence)

  • 75-100: Extreme Greed (FOMO & Overbuying)

What Drives the Index?

The index is influenced by:

  • Market Volatility

  • Momentum & Trends

  • Social Media Sentiment

  • Bitcoin Dominance

  • Derivatives Data

Why It Matters

  • Fear can signal buying opportunities when prices are low.

  • Greed can warn of an overheated market and potential corrections.

How to Use It Wisely

  • Don’t trade solely on the index.

  • Combine with technical & fundamental analysis.

  • Stay objective—avoid emotional trading!

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