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.