It always happen with my crypto investment that, once I buy the coin it prices started to fall. Once I average out the profit, it started to rise. It is pretty difficult for anyone to decide the entry point or exist point to a coin. Even the old logic of Buying in Dip, Selling in High proves wrong as investor unable to decide the dip or high point of coin. However, Lately I started using the Greed & Fear Index to estimate the timing of getting into the market or exist the market.
(snapshot from alternative.me)
What is Fear and Greed Index.?
It is an indicator or we say a meter that judge the mood of the crypto market sentiments through different criteria. It has a indicator range from 0 to 100. Below 50 shows the Fear mood of the market. 0 denotes the extreme fear nature of market whereas anything above 50 shows the average or Greed mood of crypto market. 100 shows the extreme Greed in market.
To take a deep inside the Greed and Fear Index, take a trip down to alternative.me It has a historical data of the all the Index . I took out a year of the data.
(snapshot via alternative.me)
If you look closely at the chart, you will notice that in month of Apr 21, the Index meter shows 80, which means the market is in Greed stage, however it spiked down in May'21 around 30, then recovering a bit to 70 and then fall down to 10 points.
At same time , if we look at the Bitcoin chart, then we see a comparative similarity.
(bitcoin ytd chart via tradingview.com)
Bringing both the charts closer help you to judge the chart movement, and how the Greed & Fear Index is directly related to the #bitcoin chart.
These two charts have lots of similarity and gives a clear indication how and where the market move. With 80 point of Index the bitcoin is at high and similarly with fall in Index number bitcoin prices also falls. At the end we may end up with the below summary to decide our entry and exit point into crypto.
In a nutshell
Extreme fear can be a sign that investors are too worried. That could be a right time to get into the market.
When Investors are getting too greedy, that means the market is due for a correction. And it's better to book the profit.
This Index is made after consideration of different market sentiments. It studies the mood of market through volatility, volumes,social media, surveys, dominance and trends to conclude at the parameter Index.
With so many research under the Index we can rely a bit on them for our entry and exit into the crypto market.
Peace
Namaste @steemflow
Posted Using LeoFinance Beta
Okay I am not the unlucky one 🙃. I thought it is just me.
True to that, we need to further study so that we can make sound decision on our investments.
Understanding and interpreting the numbers on charts can be hassle but if we want to stay long term might as well do it diligently.
!PIZZA
Never ....I think such things happens to everyone..predicting the price is pretty difficult....but this comparison is helping me lately...so you like to try.
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The market looks bearish and fearful today but sometimes, fear is the surest buy signal. One has to be very smart and courageous to be able to buy the dip
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