Bitcoin Fear and Greed Index is simply a Metrix used to determine the current sentiment of the market, combining data into a meter from 0 – 100. The 0 here stands for extreme fear while 100 stands for extreme greed.
However, for one to move market emotions must be attached to it, greed increases price and fear brings the price down. Knowing that human beings tend to react the same way in most contexts, their tools like the volume and previous market data can be used to predict price moves. Thus, you can draw data from social media tools, trends, and many more.
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Bitcoin Fear and Greed Index
It’s important to point out moments of greed and fear if it is gainful to act contrary to the way other people feel about the market. This is because to turn into investor sentiment can give your idea as to how you should act. For instance- be fearful, if others are greedy. be greedy if others are fearful.
Moreover, to determine market sentiment, one of the tools to measure it is the “Fear and Greed Index”. The fear and greed index aggregates data from different sources and also generates them on a scale of 0-100, as explained earlier.
This is why it matters; the fear and greed index are currently at the lowest observed level since when BTC fell more than 40% to $5,200, in March 2020.
The index was at 74, which shows “greed’. Moreover, not minding the drop of bitcoin market dominance to 50% at the time of this writing and the overall sentiment being fearful, BTC has recovered 5.7% in price overnight.
How to Use Fear and Greed index Today to Predict Bitcoin
The fear and greed index perfectly predicts reversals in bitcoin’s price action. So, anytime the fear and greed index reached close to extreme levels of fear, it is mostly predicted a reversal in bitcoin’s price. This means that the more extreme the feelings people have towards the market, the more likely a trend reversal is set to occur for BTC.
Historically, extreme fear towards bitcoin has been translated to moments of financial opportunity. The last time the index reached the levels of extreme fear was in Dec.2018, when BTC was at $3,200.
How Accurate Is the Fear Greed Index?
An index is an amazing tool for determining or predicting when a local bottom has formed on BTC’s price and also indicates when a rally could approximately occur. Though the index won’t predict which particular price point bitcoin will reverse to the upside.
However, the fear and greed index has proven to be a valuable tool in timing a shift in market sentiment and subsequent reversal in bitcoin’s price.
What is Bitcoin
Bitcoin is the largest Cryptocurrency that uses peer-to-peer technology, which makes it uncontrollable by one person. It was invented by Satoshi Nakamoto in 2008 and began using in 2009. Here, transactions are verified by network nodes through cryptography and recorded in a public distributed ledger known as the blockchain.
How to Buy Bitcoin Online
There several ways to buy BTC, but this write-up will be focusing on how to buy from the BTC site.
- Locate the bitcoin home page.
- Find the login tab and click on it to access your account.
- Progress to the “buy bitcoin” screen.
- Choose the currency you want to buy.
- Determine if you want to buy BTC in USD or any other local currency.
- Then, input the amount.
- Go through the information you entered and then, add your wallet address.
- Press on the “continue” button.
- To complete the steps, create an account if you’ve not done so.
- Fill out your payment details and follow the prompt.
These are guidelines on how to buy bitcoin online.