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Question #92 ·

How does the Crypto Fear & Greed Index illustrate shifts in investor sentiment for Bitcoin?

  • It tracks Bitcoin fees to indicate when user costs are rising or falling
  • It shows investor mood shifting from Extreme Fear to Fear as markets stabilize Right answer
  • It measures blockchain network growth to show if developers are contributing actively consistently

Why is this the correct answer?

This is correct because the Crypto Fear & Greed Index aggregates data like volatility, trading volume, social media trends, and surveys to quantify how worried or greedy investors feel. A move from the ‘Extreme Fear’ band into just ‘Fear’ means that panic sentiment is easing. For beginners, this index is a simple gauge: low values indicate pessimism and high values indicate optimism, so watching its changes helps you understand overall market psychology.