I have never understood the Fear and Greed Index or its purpose to be honest. It's kind of self-explanatory and just shows what the market is currently going through. If bitcoin's price is increasing, the fear is on the lower end. Opposite of that, if bitcoin is dumping, then it's showing more fear among investors. If the movements are sideways, the index arrow stays in the middle.
The daily values of Fear and Greed Index alone do not really make much sense, but if we average them and take monthly values it may become a nice market sentiment tool and indicator (especially for beginners) on when to buy and sell for swing trades and hodling.
What I saw other websites do is to display the today's index value as well as place the historical daily index values on top of a chart, which to me looks kind of confusing and visually overwhelming without really telling anything.
What I did was to calculate the average monthly index value and present it in a clean way in an interactive table. For example, we can see that in February 2021 and a couple of months before it the average index was Extreme Greed indicating that it might have been a good moment to sell (Bitcoin was at 60k at that time and then fell to 30k).
The same way, the index averaged to Extreme Fear in May, June, and July when Bitcoin was fluctuating between 30k and 40k but shortly after it went up to 50-60k.
Also, further from historical data we can see that usually the index can't stay the same for longer than 3 months, which only happened twice since 2018.
I am not in any way saying that everyone should use it or it's the only indicator for buying the bottom/selling the top (there's no only one indicator in crypto or finance and multiple of them should always be used at the same time), but it's a nice market feel tool nonetheless.
Releasing it tomorrow
BTC