Crypto Fear and Greed Index Today in the Extreme Fear Phase

Bittime - Today The Crypto Fear & Greed Index provided by software developer platform Alternative shows the number 25. 

This marked a drastic drop of 24 points from the previous day, taking the index from the "Neutral" zone to the "Extreme Fear" zone. This level is the lowest since September 6 2024, when the index was at 22.

Check out the potential causes of today's complete decline in the Crypto Fear and Greed Index in this article!

What is the Crypto Fear & Greed Index? 

Crypto Fear & Greed Index is an indicator that measures crypto market sentiment based on various factors. This index ranges from 0 to 100, where 0 indicates extreme fear and 100 indicates extreme greed. 

The lower the index number, the more pessimistic the market sentiment is, which usually reflects high selling pressure and great volatility. Conversely, a high number signals optimism and increased buying pressure in the market.

Read also: W-Coin Listing Update on March 25, Get Ready!

Determining Factors of Crypto Fear & Greed Index 

This index is calculated based on six main factors that influence crypto market sentiment, namely:

1. Volatility (25%) - Measures changes in Bitcoin and altcoin prices over a certain period of time.
2. Market Momentum/Volume (25%) - Analyze trading volume and price movement strength.
3. Social Media (15%) - See the growing sentiment on social media platforms like Twitter and Reddit.
4. Survey (15%) - Collect data from polls regarding investor sentiment.
5. Bitcoin Dominance (10%) - Shows Bitcoin market share compared to other crypto assets.
6. Google Trends (10%) - Analyze search trends regarding terms related to cryptocurrency.

Causes of Declining Market Sentiment 

The drastic decline in this index is likely influenced by several main factors. Macroeconomic uncertainty, increasingly stringent regulations, and Bitcoin price volatility may contribute to increasing fear in the market. 

Additionally, a decrease in trading volume and increased selling among investors may worsen current market conditions.

Read also: Bitcoin Price Prediction Today February 25

Impact on Investors and Markets 

When the index is in the Extreme Fear zone, this is often interpreted as a signal that the market is oversold and may be approaching a turning point. However, for some investors, this condition also reflects high risks that can cause further uncertainty.

On the other hand, some investors see this as an opportunity to buy crypto assets at a discount. History has shown that when sentiment is in the zone of extreme fear, there is often the potential for future price recovery.

Conclusion 

The Crypto Fear & Greed Index dropping to level 25 indicates that the market is experiencing extreme uncertainty and fear. Although this can be a negative signal, some investors view it as an opportunity to enter the market. 

By understanding the factors that make up this index, investors can make better decisions in the face of crypto market volatility.

FAQ

What is the Fear and Greed Index?

Fear and Greed Index is an indicator that measures market sentiment based on investors' fear and greed. This index helps understand whether the market is bearish (fearful) or bullish (greedy).

How Does the Fear and Greed Index Work?

The Fear and Greed Index is calculated based on various factors, such as volatility, trading volume, social media, and market trends. The index scale ranges from 0 (very fearful) to 100 (very greedy).

How to Read the Fear and Greed Index Value?

A value of 0-24 indicates extreme fear, 25-49 reflects fear, 50 is neutral, 51-74 represents greed, and 75-100 indicates extreme greed.  

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Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

Reference

Coinness, Crypto Fear & Greed Index hits lowest level since September, accessed February 25, 2025

Author: SD