Topic: Bitcoin Fear and Greed index. Don't time the market! (Read 452 times)

These things only applies when you are investing in a good asset or coin. If the coin you’re investing is a shitcoin, then it doesn’t really worth all the stress. Some people are really bad in making choices in the cryptocurrency market, and you would see them investing their money in assets that are not really worth it. They just like to follow the trend, and as time goes on the trend disappoints them.

The best decision you make is investing in cryptocurrencies that would be worth it on a long term, and not just all these one time and one shot coins that would only last just for a short time, and before you know it they will start losing value for good and wouldn’t even get another chance at increasing in value again.

After another 4 year (cycle) with the bitcoin halving period, this time, we might have a different outlook on what we call the cycle. If the proposed super cycle happens this year, predicting the market might get more difficult and make every one in the market not different from each other. It get more difficult to hold bitcoin at the price it is attaining now and ROI for holders is declining.

You're right. I saw many people who successful in front of my eyes with their proper research and i am here lol, still newbie.  

I also agree that fear and greed is lagging indicator. I would call it an indicator even. It just shows the market sentiments which can be judged by the price action too. If the price is falling and making lower lows, this means that people are fearful to invest in that coin or assets. I prefer price actions over any kind of lagging indicator.

Also, nobody is thinking that when the price was between 30- 35K last year in the first quarter of 2021, the fear and greed index was showing as extreme greed but now the price is at a similar level of 35,000$ but the fear and greed index is at extreme fear. That's how the difference is sentiments at the same price level.

Bitcoin fear and greed index is a good way to time the market but this is not perfect. For example, we are now at extreme greed which means that we should buy bitcoin now but bitcoin can still reach 31K or even below. The same is true for the upside. You may sell bitcoin at 55K as you would see full greed but bitcoin may continue to 65K or more.

My question I think still remains unanswered, why would you want a lagging indication of the feel of the market? You are saying to buy and wait for bull run, now the market might fall to 20k from here and show fear and then reach 36 and show greed, shall I then sell at 36? If we are going to do this only then why don't we just hodl? Isn't that a better option if you are ready to wait until the next bull run.

Yes, that's the way it goes, buy above then panic and sell. Buy again above, panic again and sell again  . If this is the case, there will be no progress. They don't learn from what happened.
I understand, when people buy bitcoins they want profit, including me. But there is something we must understand there. Will we always be lucky? I said no. In situations like that we have to be strong mentally and patiently.

Precisely, but only few can really ignore what is happening right now, despite experiencing the ups and downs of 2017/18 some people still freak out over every market correction, and then the panic mode sets in and give birth to non-stop selling, it is a good thing the weak hands will be gone soon so the market can reverse, honestly we really have more dumb than smart investors in the space, imagine those who bought at top will panic sell for no reason.

Crypto market is volatile and is manipulated by news, leverage, liquidations. Newbies will look at chart and say price tops up or crashes with huge trading volume because of supply and demand. They are wrong. Supply and demand always have its role but in crypto market, it means for long term. Short term, price will be pushed up to top or crashes because of liquidations which are unavoidable after triggering.

It is normal for experienced guys and with time, some of newbies will grow up, have more experience and become diamond hands. They can do this if they manage to survive through many crashes in the market and still are able to protect or reserve part of their initial capital to continue.

Personally, it will continue to be stucked there for a while. We need a bigger volume from Long liquidation, then short squeeze will occur.

This is already given, as time goes by FUD are starting to become a normal thing on Bitcoin space.
Another problem we have is those people who are trading with extreme leverage, this is one of the reasons why we keep seeing a huge candle wick on the chart, over-leveraged trading.

To be honest, a lot of people crying now because of the dump, and I consider those people are "newbies" as if they experienced some huge dumps before especially in January 2018, this thing is normal for sure.


Here's the current Bitcoin Fear and Greed index:

Not just FUD, some of the FOMOs created are also used by whales to manipulate the minds of novice investors to enter the market, so that the market will move at the price they have set. Anyone can take advantage of well by taking advantage of every moment that occurs in the market. Don't be too greedy and don't be too afraid when you enter the market.

After reading your first question, I do understand what you’re trying to say, and it is quite the same thing that they OP is trying to answer here. When the market is in bearish time, people are afraid of investing because they feel that the market would continue to go down and not gain any value for them when they invest. So when the market is in the fearful state, that should be the right time for you to invest.

If you’re able to invest during the bearish time, and hold it till the bull run starts, then you would be making profit while others are trying to rush in out of greed, and when you notice that the greed is high during the bullish times, you can then decide to sell your coins and take your profit before the market starts to fall. So what they OP said really applies to buying and selling. But at the same time you should also try to do technical analysis because it can be quite helpful.

I didn't get what are you trying to say. I mean if I am doing my analysis separately how is this useful? Moreover my very simple question was that what could I have done yesterday after seeing the index. A simple answer from anyone would have been yes buy but what happened today morning was that market tanked $5k and a person would end up in loss.

This is the only time you would really see this fear and greed index would be helpful on which you could presume out that the entire market is on that fear side
where you could really apply your own analysis and made out specific actions basing up on what you do saw.It is right that you shouldnt rely on it since it wont
be accurate but having these things is much better rather than have none because having at least some reference isnt bad at all.

Yes, I mean it can give an idea of which direction to trade at maximum, you are right that it might help me find a good entry, but what I am trying to say is that either you be a trader or you be a HODLer when it comes to bitcoin, if you are a trader, then this is a pretty lagging indicator, at maximum the idea this index gives me is which direction to trade. While if you are HODLer this won't really matter to you. And the information relating to bullishness or bearishness of the market can be easily fetched by just a quick glance on the chart of the coin itself. Like if currently we are in extreme fear, what do you suggest I do if I have a capital of let's say $1000?

Why not?

You can not use that index for your decisions if you are a FOMO trader or investor. But if you apply the principle "Being fearful when others are greedy and being greedy when others are fearful", so yes this index can help you to make decisions. Obviously, it won't help you to find out exact bottoms but good enough to base on it and make your entry in bottom range. That's good enough.

Actually, this index is quite helpful in indicating the current mood of the market, but the problem I see is that you cannot buy/ sell based on this index, it's because you will see in bear runs, this index remains in the fear stage while in bull run it stays in the greed stage, now technically one should buy in fear stage and sell in greed stage, but this index can last in fear stage for very long periods, for example, the market stayed in "Fear Range" from may 15 to july 26, but similarly, on 16th June it tried to go out of the fear area, now if you would have brought anytime on this day thinking of the end of bear run chances are you would have lost capital because market even touched many lower lows even after this time, similarly even after reaching the greed stage it touches a lot of higher highs, which means this index can just be used to know the market stage, you can't decide your trades based on it.

You can check it with Bitcoin Yearly Lowest price that is a very good chart for considering long term trend of Bitcoin.

I made charts for Yearly Highest and Lowest Price

When you look at lowest price that means you are looking at worst performance of Bitcoin in each year. See, the trend is absolutely bullish. What do you need to get profit with Bitcoin? Simply get in and HODL.

Previous year at the same time bitcoin price was around $30k-$32k and the bitcoin price increase and reached $66k+ in 2022.Now bitcoin price around $43000+, i Think bitcoin price will be more increase and i hope bitcoin will be more development. Don't be panic and don't miss that great opportunity, buy and hold long time bitcoin. I hope will be get good profit in future.

At least, that is a tough situation for people who are still at the crypto as we never imagine that the price will go to that price for some time. But we can smile after that as the price increases and returns to the high price. But still, I will call myself a newbie who needs to learn more about controlling emotion because that happens to anyone in crypto. Panic will possess us to make a fast decision, but the experience will give us advice on what we should do. So yes, it is, do not panic is the key and we must have that.

If the HODLers/early miners of 2012 who received their UTXOs priced at $6.00 a coin started selling all of their coins and caused a crash to $10,000 a coin, it would be a time of extreme greed for the market, not extreme panic? OK, franky1. Thankfully normal people don’t analyse the market like you.

Exactly and most especially when you happen to buy at about the top of the market. Most people tend to cut their loss because of the fear that they don't know how far low that price might get but if you have been holding from quite a good price from the bottom, I would definitely take some profit or sell to buy buy back once we are near the bottom again though this is hard to confirm but this is the risk we all have to take in this space.

I think ...if you experienced the price drop from $18 000 to $3000 back in 2017 or after that... you cannot be called a newbie anymore. A lot of people thought that the price will go down to zero back then and it was panic stations all around. The die hard Bitcoiners stuck to their guns and they Hodled right through that.

The reward..... $60 000+ Bitcoin price in 2021  So, what have we learnt from that? ...Answer : Do NOT panic .... hodl for long-term profits, not short-term losses. 

Isn't that how that works, when the fear index is high, you buy more bitcoin and when you see that greed index is high then that's the time that you sell almost every bitcoin in your possession or any crypto that you have that has high greed index. That's how I am doing my trades recently and how I made some profit out it and so far so good for me.

I'm not buying that mate because capitalists or businessman will not invest too much of what they think may lose so wrong that less experienced are the larger investors .
We know nothing about this in reality mate , because in crypto privacy we know small things on who really makes the market moves.
Panicking happens every time and that is part of the market because we are talking about Money here and people are afraid in losing.

and what is annoying is that some of those who are less experienced in this investment market are those who have a large capital.
with large capital and fairly large asset ownership. provoked to follow FUD, of course, it became a big problem for the market when some people with large capital began to be led to follow FUD.
the problem is the experience and panic about the ownership of the assets they have. they are less calm in reading the situation.

Interesting analysis. Notice how the cycle is getting changed over the period of time now! The four year cycle does not seem to be followed by the 2021-2022 year due to the Greed:Fear ratio being at its peak. If we start from the bottom of graph and previous years then analyse that how Greed pushes the market upwards following the sharp bearish trend but again followed by breaking of the all ATH records of previous years.

This has not happened in the last two years. The pandemic is also big contributor for this thing as we saw down turn in the financial systems and economic crisis world wide.

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.

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.

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.

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.

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.

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.

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.

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

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

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.

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 😂

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.

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.

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.

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.

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.

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

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

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.

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.

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