After Saturdays Bitcoin plunge of 21%, investors are promoting a notion called “Fear and Greed.” Posting on Twitter and other social media platforms, they claim that this plunge is an opportunity for people to get on the Bitcoin bandwagon.
What is Fear and Greed?
Fear – Greed is a way to measure volatility, momentum, and demand in the traditional market. However, the crypto version of this idea goes as follows. It can establish if traders are too optimistic about the market (Greed) or clumsy (Fear). It can also consider several other factors like the trends currently viral on social media and google terms.
The index ranges from 0 to 100 – from extreme fear to extreme greed. Currently, it stands at 25. When Bitcoin was at its record high of $69,000 last month, it stood at 80. The largest cryptocurrency on Tuesday in New York stood at $51,000.
When experiencing a relatively lower price of Bitcoin, fans see this to mean that Bitcoin has been oversold and the prices will rebound.
One of the investors that have kept a close eye on the index is Ali Yilmaz. He’s based in Bolu, Turkey, and is a university instructor. He has mentioned his plan to add altcoins to his 10,000 euro portfolio, which as of now, includes Bitcoin, Ethereum, and Ripple. He concluded by saying, “we have so little information on cryptocurrencies, that this ‘Fear and Greed’ index is important to get a sense of market sentiment. I buy the fear and sell the greed.”
In the past, Bitcoin supporters have brought up several excuses as to why bitcoin prices are normal. They have compared it with previous bull runs and have even said volatility is part of the DNA of digital currency. Wiipongwii added, “Ultimately no indicator or index can perfectively predict market movements.”
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