Bitcoin Fear and Greed index. Don't time the market!

[tranthidung]

This topic is for newbies who participated in Bitcoin and crypto market in last 2 years or just a last few months or weeks. I am sorry to call people who have less than 4 years in the market as newbies. Reasons: they have yet gone through a full cycle of bullish and bearish period so they don't really experience how rosy and bloody the market is in different periods.

Today, I would like to share a chart for Bitcoin Fear and Greed Index.

Newbies won't notice it but the chart does not lie us. If you are not too sensitve, you won't realize it. On the chart, the psychology of market in January of 2021 and 2022 are totally different. The first one is extremely greed (score is 93) and the second one is extremely fearful (score is 21).

It's time to practice and get matured in this market.

If you have time, read two other topics and related resources

• Bitcoin All time high charts and news; Bitcoin Obituaries
• EndtheFUD.org

[Poker Player]

In general what you say is correct but I would add that you need to have thoroughly researched the asset you want to invest in and be clear why you want to do it. If you simply invest in a fancy shitcoin because it is going down based on the argument of investing when everyone is fearful, you may find that the shitcoin goes to 0. This is true for investments in general, startups, low cap fancy stocks etc. 

Many newbies invest simply waiting for the price to go up, and we have seen threads like that in the B&H section, but if they don't research, don't inform themselves, and simply use the fear and greed index, they are playing roulette.

So, I would invest if people are fearful in bitcoin because I know its intrinsic properties and I am confident that it will have a great long term future. I would not sell if people are greedy unless I consider Bitcoin to be too high a part of my net worth, because I do not see an asset that is going to be superior.

[NeuroticFish]

On the chart, the psychology of market in January of 2021 and 2022 are totally different. The first one is extremely greed (score is 93) and the second one is extremely fearful (score is 21).

Imho, in order to be correct/accurate, it worth adding that fear/greed states/indexes are not related to the actual price of bitcoin, it's at least related to the trend and it's speed/slope.

[tranthidung]

Imho, in order to be correct/accurate, it worth adding that fear/greed states/indexes are not related to the actual price of bitcoin, it's at least related to the trend and it's speed/slope.

Thanks for the clarification. I don't mention it but usually, price will have some delayed effects from Fear and Greed psychology of the market. It is why we have win and lose streaks.

It takes time to end greed or fear of the crowd.

• Bitcoin Streaks (Rise/ Fall) - 2013 to 2020

In general what you say is correct but I would add that you need to have thoroughly researched the asset you want to invest in and be clear why you want to do it. If you simply invest in a fancy shitcoin because it is going down based on the argument of investing when everyone is fearful, you may find that the shitcoin goes to 0. This is true for investments in general, startups, low cap fancy stocks etc. 

This!

If people don't do own research and understand (at least basics) of a project they want to invest in and they simply make investment by advice of others, greed, in the end they will exit when they are fearful. Most of newbies do like that in the market.

They don't have to understand about Bitcoin in technical aspects, know how to code, run a full node, etc. but they should know at least

• Controlled supply
• Equivalent Network Time

[Wind_FURY]

OP, we are all plebs, and newbies, with some trolls who missed their opportunity. The rich ones who truly made millions have left the forum. Plus I believe REAL FEAR has currently not entered the market. Everyone still agrees with me when I say let’s buy the Dip, and HODL. Hahaha.

[buwaytress]

OP, we are all plebs, and newbies, with some trolls who missed their opportunity. The rich ones who truly made millions have left the forum. Plus I believe REAL FEAR has currently not entered the market. Everyone still agrees with me when I say let’s buy the Dip, and HODL. Hahaha.

I've only been here one full cycle but yeah, you got a point. We're still here because we missed our opportunity OR we never intended to make one (I count some of the mods and old-timers here who very obviously to me already have it made and are just here out of the goodness or trollness of their hearts).

Oh and yes. This? This isn't fear. I wrongly thought we'd purged the bears in 2020, but those who didn't leave are the ones piping out now, not the noobs that all of us are.

[Vaskiy]

During last year same time the price of bitcoin was around $32000, and the market was completely bullish. This made people go greedy on bitcoin. With time more people got into bitcoin usage as a result of pandemic which made everyone go find opportunities to earn online. The greed is out of the growth.

Today the market has grown even higher, but the bearish move over the last few weeks make people increase the fear whether to invest or wait for an opportunity lower. For Whales it isn't a big thing, but the small holders always fear for buying at the top and mark the profit.

[yazher]

That's why they tweet anything regarding the situation of the market where they will use it to invest when things will go exactly as they planned. Thankfully we have more intelligent investors today than before, they won't settle for what the influencers think about bitcoins and cryptocurrencies nowadays. but still, when the market is facing some difficulties, there are lots of investors who panicked and when that happened, opportunities who were waiting for the price to decrease are ready to pump up the price again. If you master such technique, you would never suffere any loss in the market.

[_act_]

I am sorry to call people who have less than 4 years in the market as newbies. Reasons: they have yet gone through a full cycle of bullish and bearish period so they don't really experience how rosy and bloody the market is in different periods.

Four year is too much for some people, some people can spend 10 years and remain to be a newbie because they are only hearing about most but they do not know what is going on and the facts but for someone that are into crypto for 4 years, study the market and know many things, they will not be called newbies. I am getting what you are saying but we have to consider that people have different cognition and some people learn the past very fast to know the right direction to take.

[rhomelmabini]

OP, we are all plebs, and newbies, with some trolls who missed their opportunity. The rich ones who truly made millions have left the forum. Plus I believe REAL FEAR has currently not entered the market. Everyone still agrees with me when I say let’s buy the Dip, and HODL. Hahaha.

This one.

Seems I've encountered the bloody one, yet I can say I'm not considered as an expert one too. I don't consider F&G as the best tool as well, I think it needs some purge with the current noise it made on the market and who are those really in it for the long term. I wonder if it decrease the twitter posts and those TikTok vids lol 😂

[hatshepsut93]

The real reason why people here can get so emotional is not because they are new to Bitcoin, but because they are new to trading in general, and being exposed to such extremely volatile market from the start can be very stressful.

Fear and Greed index is just an indicator, it doesn't predict where Bitcoin is going in the long run or even what's going to happen in the short term. It seems logical that after "fear" comes "greed", but no one knows exactly how long the "fear" will last.

[franky1]

what would be useful as a better measure of "fear" or "greed"
its not a simple

      /\
    /    \
\/
price up=greener
price down=redder

but instead. look at all the transactions of bitcoin. and note the exchange rate at the time of UTXO creation. and the exchange rate when that UTXO is spent.

if the UTXO moves(destroyed) when the price is lower than it was created. thats a signal of fear. if the utxo moves when it has gained XXX% thats a sign of greed.

EG i have coins i havnt moved since 2012($6/coin) so my utxo would show as greed.
but someone else that bought at $60k and is now spending that utxo at $40k is obviously moving at a 'loss', which can be fear

of course not all movements = 'spending' / 'exiting at a loss' . but its a better way to view how many coins people decided that its time to do something with based on value. which is a better indicator than the simple chart that just makes price rise greener and price drops redder(high school level logic)

using the UTXO of creation and destruction (btc moving in transactions)
you can then plot it into a graph against the bitcoin price of the % of greed vs % of fear

EG although today the topic creators graph shows we are in a red fear zone.. if i sold my coin today. im making 6666x profit. which would be extreme greed. not fear.
if majority of todays exchange trade volume was from 'early adopters' it would be a greed day, not a fear day
if majority of todays exchange trade volume was from 'late adopters'($50k+) it would be a fear day, not a greed day

[Ararbermas]

That's why they tweet anything regarding the situation of the market where they will use it to invest when things will go exactly as they planned. Thankfully we have more intelligent investors today than before, they won't settle for what the influencers think about bitcoins and cryptocurrencies nowadays. but still, when the market is facing some difficulties, there are lots of investors who panicked and when that happened, opportunities who were waiting for the price to decrease are ready to pump up the price again. If you master such technique, you would never suffere any loss in the market.

that's what it is mate, wherein they take advantage of what situation the market has especially when it's downtrend because it's a big opportunity to buy dip. That's why i wouldn't be surprised what we saw around internet are negatives especially if market plunges and obviously it's to intimidate some weak hands in the market so that some investors as well can avail cheap price.. Lol

[noormcs5]

That's why they tweet anything regarding the situation of the market where they will use it to invest when things will go exactly as they planned. Thankfully we have more intelligent investors today than before, they won't settle for what the influencers think about bitcoins and cryptocurrencies nowadays. but still, when the market is facing some difficulties, there are lots of investors who panicked and when that happened, opportunities who were waiting for the price to decrease are ready to pump up the price again. If you master such technique, you would never suffere any loss in the market.

that's what it is mate, wherein they take advantage of what situation the market has especially when it's downtrend because it's a big opportunity to buy dip. That's why i wouldn't be surprised what we saw around internet are negatives especially if market plunges and obviously it's to intimidate some weak hands in the market so that some investors as well can avail cheap price.. Lol

When the market is in extreme fear 10 or less, its a very good time to buy. Also if the market is in extreme greed that is 90 or above, it's time to sell and do not take new entries. Market comes to these points once or twice in a year, so when you see these points on the fear and greed index, its best time to take entry or exit from the market.

[ShowOff]

OP, the fear is not just for beginners because when most of us are not convinced of the potential of bitcoin then investment fear is bound to come.

I really believe there are a lot of people who are less likely to buy bitcoin in 2018-2019-2020 because the market is not that great. People are not trained to be patient and know how the future of bitcoin is based on the history of ATH that has been achieved. In addition, ATH is an achievement that is always eagerly awaited, but we cannot guarantee that it will continue to be repeated in a 4 year cycle. However, bitcoin is one asset that really needs to be in our portfolio.

[The Cryptovator]

It's pretty simple math, once prices start to move up we become greedy and enter then. If the price start dumps a fear work in our mind always. Even I am not a newbie it's the same for me as well. Especially during the dump, I am not out of fear. But most of the time when start pump I do not become greedy. I am not a good trader, so I decide to become a mid-term holder. So during bumping price, I won't dare to enter.

[Fundamentals Of]

What is hard is to control emotions. That is especially a lot harder if one is a newbie. When someone who has just entered the crypto market is seeing the price falling consistently in a certain time period, all kinds of bad possibilities will be rising in his mind. That's the time a newbie will most likely sell.

But to someone who has been in the market for a long time, who has been through the worst and the best days in the market, such bearish moments might even be exciting ones. Those are certainly opportunities to buy.

[crwth]

I like the summarized type of chart where the index is seen for all time. I think the best way to get that in your head is to see the past happenings and correlate if it will be the same sentiment. So if you are thinking about buying Bitcoin, and then you see that people are fearful of it, then it's a great time to buy. I'm not sure if this would be a great indication, but you can still be profitable if you do it correctly.

[bitzizzix]

What is hard is to control emotions. That is especially a lot harder if one is a newbie. When someone who has just entered the crypto market is seeing the price falling consistently in a certain time period, all kinds of bad possibilities will be rising in his mind. That's the time a newbie will most likely sell.

But to someone who has been in the market for a long time, who has been through the worst and the best days in the market, such bearish moments might even be exciting ones. Those are certainly opportunities to buy.

Yes, another reason is because beginners do not have much experience or even no experience at all, so when the market price tends to decline they will be emotional, worried and panic selling even though they are losing money.
and that will make the market worse because beginners have weak hands and easily falter, compared to those who have been in the industry for a long time and they stay calm despite the worries and holding it in is a last resort or take advantage of the downturn by making purchases to grow holdings, because the hike is sure to happen just time and patience is needed next.

[Obito]

That's why they tweet anything regarding the situation of the market where they will use it to invest when things will go exactly as they planned. Thankfully we have more intelligent investors today than before, they won't settle for what the influencers think about bitcoins and cryptocurrencies nowadays. but still, when the market is facing some difficulties, there are lots of investors who panicked and when that happened, opportunities who were waiting for the price to decrease are ready to pump up the price again. If you master such technique, you would never suffere any loss in the market.

Sadly though, we are still being overrun by dumb investors who just moves depending on how the FUDs want them to move, it's not really a big problem though but there's more dumb investors than the smart ones so they end up making the market move to their liking even if we are smart. Good thing that anyone can take advantage of this kind of problem though, it's not that difficult to follow through this and make yourself some cash while following it.