Fear and greed indicator

[Jet Cash]

CNN has created a new indicator called "fear and greed". It tracks seven indices, and shows the results on a simple meter.
http://money.cnn.com/data/fear-and-greed/

Bitcoin prices seem to be influenced by the same sentiments. Would it be possible to create a fear and greed meter for Bitcoin?

[malikusama]

Although It will be a bit hard and complex to make it for bitcoin because meter will have to link with the global market of bitcoin to analyze every aspect, but indeed it would be great and really beneficial for traders as well as the newcomers.

[aceptamosbitcoin]

CNN has created a new indicator called "fear and greed". It tracks seven indices, and shows the results on a simple meter.
http://money.cnn.com/data/fear-and-greed/

Bitcoin prices seem to be influenced by the same sentiments. Would it be possible to create a fear and greed meter for Bitcoin?

Both Fear and Greed are the main power driving masses.
I don't think it's much applicable to alts, because there the big money are moving prices instead of mass money, but I like it as a meter for conventional trading.

[teilwalL05]

Well indicating the bitcoin fear and greed maybe to show how much it indicates if the market is in the fear state or the greed state, For each indicator, they look at how far they've veered from their average relative to how far they normally veer, And each indicator have a scale from 0 to 100 The higher the reading, the greedier investors are being, and 50 is neutral, Well let's just say that this is not needed and can only make certain people to trust these kind of fear and greed meter that let's say it can be manipulated by a well known mainstream media like CNN,

[clrpod]

It seems possible, but there are no such indicators for bitcoin to base it off of. You could produce a hitwords things similarly to how they have included in their indicator and then you would just need indicators for similar things. The toughest thing would be to try and understand what indicators should be used to gauge fear and greed.

I do think that the indicator isn't so revolutionary though and in fact isn't really much of an indicator. It's quite clear just from an overarching view that extreme fear would be the current mindset in stocks. The indicator's seem more to be used to justify the conclusion instead of being used to indicate how things will be in the future.

[pawel7777]

Out of their 7 indicators, you could only apply 3 to Bitcoin, maybe 5 if you wanted to do it for entire Cryptocurrency market, and the data would be less reliable than the data for stocks. So probably no point in strictly applying the same indicators.

I would love to see something like that for BTC/cryptos, CoinDesk had similar tool for measuring market sentiment index (positive/negative) but it's retired now and I don't know whether it was any good and how exactly was that measured.

And I have my doubts on usefulness of the CNN's tool. Current score is slightly lower than that of 2008 crash and I don't think things are as bad (sentiment is as low) as back then.

[xdrpx]

One part of the Fear and greed indicator dictated in the video description mentioned about VIX index [Volatility Index]. Basically the VIX is plotted against the price graph of the stock or asset and if the price goes down the VIX goes up and vice versa. Something like this could be easily made possible to determine the Fear / Greed ratio. Unlike Junk bonds and treasuries, Bitcoins may have other market sentiments like Regulatory pressure, Market Momentum  -again can be determined by SMA's and ease of liquidating the asset. Maybe we add all these up to start up with and create a Bitcoin or cryptocurrency version of 'Fear and Greed' index.

But lets also remember, like any other indexes used to measure the exact moment to buy or sell the asset, there's still no guarantee on if this would work at all times. Bitcoin is mostly volatile because it's not restricted to a country and it's growing market demand.

[BitHodler]

And I have my doubts on usefulness of the CNN's tool. Current score is slightly lower than that of 2008 crash and I don't think things are as bad (sentiment is as low) as back then.

It's barely useful. In most cases you can figure things out yourself without needing the biased position and opinion of those who deploy whatever tool. In case of CNN, it's clear that they show you what they want you to see.

It might somewhat be subjectively indicating the obvious, because they at least have to show that they aren't complete noobs and biased, but most of the people knowing CNN look right through that.

It's not for nothing that I have always ignored these tools, and will continue to do so for many more years, especially when it comes to a non crypto party thinking it can apply traditional market logic on crypto. It doesn't work like that.

[aceptamosbitcoin2]

CNN has created a new indicator called "fear and greed". It tracks seven indices, and shows the results on a simple meter.
http://money.cnn.com/data/fear-and-greed/

Bitcoin prices seem to be influenced by the same sentiments. Would it be possible to create a fear and greed meter for Bitcoin?

http://bigsig.com/s/jet-sig.png

Both Fear and Greed are the main power driving masses.
I don't think it's much applicable to alts, because there the big money are moving prices instead of mass money, but I like it as a meter for conventional trading.

ATTENTION

the user aceptamosbitcoin stole the user account in this forum.

You are using my name account.

I am already taking the necessary steps to be able to recover my account again.

Please ignore your comments or your signature is a scam.

[lotfiuser]

thats a good thing and i think it can be used on btc trading as its come from cnn idont know how chart works but i will find out with some pro friends

[Slark]

I don't think that this type of benchmark will gonna work at all for Bitcoin. Crypto market is not regulated, driven purely by demand, the hype of the moment and news.
Bitcoin market sentiment is characterized by 3 stances: bearish (after some kind of bad news, regulatory law, possible ban) bullish (growing adoption rate, positive regulatory laws)
and neutral (when we have no big news to push the price higher and side trading is name of the game).

Side note: bitcoin market is permanently linked to fear - as we have nothing which will prevent the price collapse/serious market decline at this point.

[clrpod]

I don't think that this type of benchmark will gonna work at all for Bitcoin. Crypto market is not regulated, driven purely by demand, the hype of the moment and news.
Bitcoin market sentiment is characterized by 3 stances: bearish (after some kind of bad news, regulatory law, possible ban) bullish (growing adoption rate, positive regulatory laws)
and neutral (when we have no big news to push the price higher and side trading is name of the game).

Side note: bitcoin market is permanently linked to fear - as we have nothing which will prevent the price collapse/serious market decline at this point.

The stock market has the same 3 states only. Similarly there is nothing preventing it from collapsing/seriously declining. It's all based on perceptions in either market, if people suddenly decide they do not want the stocks or the cryptos then they will collapse.

[pawel7777]

...
The stock market has the same 3 states only. Similarly there is nothing preventing it from collapsing/seriously declining. It's all based on perceptions in either market, if people suddenly decide they do not want the stocks or the cryptos then they will collapse.

Not quite. Stocks are backed by the actual companies providing goods/services. To overly simplify: imagine listed, profit making company, with current position of $100 million net assets. If you hold a share representing 1% of company, then you wouldn't sell it for anything below $1 million no matter how crazy the market gets, just like you wouldn't sell $100 bill for $90.

You don't have this with crypto. There's no particular reason why BTC can't be worth say $1,000 or $100,000.

[clrpod]

...
The stock market has the same 3 states only. Similarly there is nothing preventing it from collapsing/seriously declining. It's all based on perceptions in either market, if people suddenly decide they do not want the stocks or the cryptos then they will collapse.

Not quite. Stocks are backed by the actual companies providing goods/services. To overly simplify: imagine listed, profit making company, with current position of $100 million net assets. If you hold a share representing 1% of company, then you wouldn't sell it for anything below $1 million no matter how crazy the market gets, just like you wouldn't sell $100 bill for $90.

You don't have this with crypto. There's no particular reason why BTC can't be worth say $1,000 or $100,000.

I understand that, but there's still nothing to conclusively say that those assets must be worth such an amount. Take for example the case of a bank, there assets may include loans that they have granted to others. While on a balance sheet these may show a worth of $100m, if for some reason there is little confidence on these loans being repaid (say the loanee is in danger of going under) then this asset is actually worth much less.

You can then end up in situations where that begins to devalue the stock price and that can only lead to further causing issues, many a company has failed because their stock price fell and nothing more.

[pawel7777]

...
I understand that, ...

Do you? The rest of your post suggests otherwise. Unless you're arguing just for the sake of it.

but there's still nothing to conclusively say that those assets must be worth such an amount. Take for example the case of a bank, there assets may include loans that they have granted to others. While on a balance sheet these may show a worth of $100m, if for some reason there is little confidence on these loans being repaid (say the loanee is in danger of going under) then this asset is actually worth much less.

This has got nothing to do with my argument being: healthy company won't collapse only due to the panic in stock market.
You came up with example of company going unhealthy without even mentioning correlation with stock market.

Not that it matters but banks (and not only) are legally required to assess the recoverability risks and make provisions for doubtful debts, which would be reflected in the balance sheet.

many a company has failed because their stock price fell and nothing more.

Name one. Just one. You can't. Health of the company influences its stock price, not the other way around.

[browserfan]

Actually, there is a group that is offering a fear and greed index for crypto at https://alternative.me/crypto/fear-and-greed-index/.

I read about them on strawpoll since they are featuring the weekly sentiment surveys.

But it seems like they just started two weeks ago.