News

What is Crypto Fear and Greed Index and What Does it Tell Us About Bitcoin Price Before Halving 2024?

What is Fear and Greed Index Crypto? Deep-dive the Fear and Greed indicator & discover what it means for market ahead of Bitcoin (BTC) halving

By Isaiah Mccall

Last Updated: Apr 3, 2024

What is Fear and Greed Index Crypto? Deep-dive the Fear and Greed indicator & discover what it means for market ahead of Bitcoin (BTC) halving

Ahead of the Bitcoin Halving event, retail investors are asking ‘What is Fear and Greed Index Crypto?’. In this article, deep dive into the fear and greed indicator and discover what it means for the BTC market in the weeks to come.

Originally a stock market tool by CNNMoney, the Crypto Fear and Greed Index measures the pulse of the cryptocurrency market.

The indicator and its readings are simple to understand, on one end of the spectrum – extreme fear suggests undervalued markets, while greed suggests overvalued markets due for correction.

(Fear and Greed Index)

For the stock market, CNN considers factors like junk bond demand, market momentum, and safe-haven demand, among others, each equally weighted at 14.2%. However, crypto’s Fear and Greed Index works much differently.

What is the Crypto Fear and Greed Index? How Does It Work?

(Crypto Fear and Greed Index)

Like the Bitcoin Rainbow Chart, the F&G index is a momentum indicator, and like other oscillators, it trends in one direction whenever the market is running.

The Crypto Fear and Greed index evaluates several factors to gauge market sentiment:

    • Volatility (25%)
    • Volume (25%)
    • Social Media buzz (15%)
    • Surveys (currently paused, 15%)
    • BTC Dominance (10%)
    • Google Trends (10%)

As CoinGecko, one of the leading independent cryptocurrency data aggregators, wrote, “The Fear and Greed Index has shown impressive accuracy over the years; this is as regards its ability to correctly represent investors’ sentiments in figures and scales.”

Using the index as a guide, buying during periods of extreme fear can be an opportunity to invest at lower prices, while setting personal sell targets rather than relying solely on the index for exit signals.

Indeed, the F&G helps us remember the most important piece of advice you can get in the market: The trend is your friend. Don’t fight it.

Warren Buffett’s famous quote – “Be fearful when others are greedy and greedy when others are fearful,” also comes to mind.

One limitation to this, however, is you can get double all-time highs. In 2021, Bitcoin went from $60,000 to $30,000, to $68,000 in a matter of months. Sometimes, the greed doesn’t stop – but it almost always retraces.

What Does This Mean For The Upcoming Bitcoin Halving Event?

(BTCUSDT)

Are you wondering when Bitcoin will go bullish post-halving? Mark your calendars for approximately a week after the Halving Day around April 20.

In 2020, the bull run did not kick off on the Halving Day itself.  Just a day after the Halving, Bitcoin plummeted by -40%.

This suggests that post-Halving, the market sentiment, as reflected in the Fear and Greed Index, will result in a “sell the news” phase before any bull run starts.

Yet, rest assured – the supply shock introduced by the event will take effect with time – and bullish investors expect BTC  to reach $200k by 2025.

The Bottom Line: Fear And Greed Index Crypto Suggests Halving Is Sell The News

The Crypto Fear and Greed Index is useful for making informed decisions without succumbing to emotional biases, and provides a multi-faceted insight into the macro market sentiment.

 

Recently the index has shown extreme greed levels not seen since November 2021, however, recent weeks have seen a noteworthy drop in the intensity of greed in the market suggesting we may be at the early stages of a significant bull run or a historic crash. Either way, stay tuned with 99Bitcoins.com as we ride to Valhalla together.

EXPLORE: What is Spatial Computing Crypto? What Are the Top 3 Spatial Computing Crypto to Buy in 2024?

Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

Disclaimer Icon
Disclaimer
Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
99Bitcoins may receive advertising commissions for visits to a suggested operator through our affiliate links, at no added cost to you. All our recommendations follow a thorough review process.

Free Bitcoin Crash Course

  • Enjoyed by over 100,000 students.
  • One email a day, 7 days in a row.
  • Short and educational, guaranteed!

Why you can trust 99Bitcoins

10+ Years

Established in 2013, 99Bitcoin’s team members have been crypto experts since Bitcoin’s Early days.

90hr+

Weekly Research

100k+

Monthly readers

50+

Expert contributors

2000+

Crypto Projects Reviewed

Google News Icon
Follow 99Bitcoins on your Google News Feed
Get the latest updates, trends, and insights delivered straight to your fingertips. Subscribe now!
Subscribe now
Isaiah Mccall
Isaiah Mccall
Crypto Analyst

Isaiah McCall is an ultramarathon runner and journalist for 99Bitcoins. He started at USAToday in 2019 and now has a Medium blog following of 30k+ and millions of views. Follow him at @AfroReporter Read More

Back to top