Crypto market greed index drops to 32, market sentiment still in "fear" zone

According to Odaily reports, based on data from Alternative.me, significant fluctuations in the Fear and Greed Index have been observed in the cryptocurrency market over the past few days. The overall index, which includes the Greed and Fear Index, has sharply declined from a high of 61 last week to currently 32. This figure indicates a “Fear” zone and has dropped significantly from yesterday’s 44.

The Fear and Greed Index has significantly retreated in the past week

The Fear and Greed Index, which reflects market sentiment, has shown clear fluctuations over the past week. After reaching a high of 61 last week, it has continued to decline, remaining mostly within the fear zone throughout this period. The current value of 32 has fallen more than 10 points from yesterday’s 44, symbolizing a substantial deterioration in market sentiment.

Looking at historical data, the index was at 26 one week ago, and about a month ago, it dropped to 20, which is considered an “Extreme Fear” level. The current level of 32 is somewhat improved from that period but still remains within the “Fear” zone, indicating that market participants’ sentiment remains cautious.

Six key indicators measuring market psychology

The Fear and Greed Index is not a single indicator but a composite index reflecting multiple aspects of the crypto market. It is composed of the following six components, each playing an important role in shaping market sentiment.

Components and their weightings:

• Volatility (price fluctuation intensity): 25%
• Market trading volume (trading activity): 25%
• Social media buzz (interest on SNS): 15%
• Market surveys and movements: 15%
• Bitcoin dominance in the overall market: 10%
• Google search trend analysis (search volume for information): 10%

These indicators work together to quantify market sentiment on a scale from 0 to 100. A score close to 0 indicates “Extreme Fear,” while a score near 100 indicates “Extreme Greed.” The current score of 32 continues to reflect a cautious stance among market participants.

Market fluctuation patterns indicated by historical data

The trend patterns of the index clearly show how market sentiment in the crypto space fluctuates over time. While it has recovered from the “Extreme Fear” level of 20 a month ago to the current 32, the sharp drop from last week’s 61 suggests that the greed psychology among market participants has cooled rapidly.

Such fluctuations in the index are more than mere numbers; they serve as important signals indicating shifts in market psychology and investment decision points. The current “Fear” zone suggests the possibility of a market bottom formation, while also leaving room for further adjustments, making it a key indicator for investors to monitor.