One highly acclaimed tool that has been instrumental for Bitcoin investors is the Fear & Greed Index (F&GI), offered by Alternative.me since February 1, 2018. This index refreshes its values on a 24-hour basis.
The Fear & Greed Index excels at predicting Bitcoin bottoms
The F&GI assesses market sentiment, representing extremes of fear and greed among investors. While it is notorious for often reaching high values, such as 90 out of 100, this does not necessarily indicate the price peak. The last peak, reached at $69,000, recorded an index of 84, demonstrating that extreme optimism can persist even without reaching the pinnacle.
Although not infallible in predicting market tops, the F&GI becomes valuable when combined with other indicators like Funding Rate and the Days Since ATH Chart. Its strength lies in identifying moments of pessimism, notably when the value is in the red, below 25, and especially below 15. During these moments, attractive buying opportunities arise, particularly for investors with medium to long-term perspectives.
We offer Index alerts and an interactive chart
Our Bitcoin-exclusive platform, CounterFlow, provides Customizable Alerts for the F&GI, sending warning messages when the user-defined value is reached, enabling proactive investment management without the need for constant market monitoring. Additionally, our platform offers a visual representation of the Fear & Greed Index through its own Chart.
Examples of Purchases Using the Fear & Greed Index:
Purchase 1:
- Date: July 19, 2021
- Bitcoin Price: $29,610
- F&GI Index: 19
- Sell Date: October 20, 2021
- Selling Price: $62,600
- F&GI Index at Sale: 84
Appreciation: 111%
Purchase 2:
- Date: April 15, 2020
- Bitcoin Price: $7,170
- F&GI Index: 13
- Sell Date: March 30, 2021
- Selling Price: $58,725
- F&GI Index at Sale: 76
Appreciation: 719%
These examples illustrate how identifying moments of pessimism through the F&GI can lead to lucrative opportunities when combined with well-thought-out strategies and a commitment to the long-term in the Bitcoin universe.
