Question #372 ·
How does the Fear & Greed Index measure collective mood in the Bitcoin market?
- It measures Bitcoin blockchain transaction speed and volume to determine market sentiment
- It tracks Google search trends to quantify fear or greed in investors
- It gauges market emotions by analyzing volatility, social media, surveys, dominance metrics Right answer
Why is this the correct answer?
The Fear & Greed Index combines multiple data points such as volatility levels, social media sentiment, Google search trends, market dominance, and surveys to quantify the overall mood of Bitcoin investors. When the index shows extreme fear, prices often bottom as selling pressure peaks. Conversely, extreme greed can signal overbought conditions. Beginners find it a helpful tool for gauging emotional extremes and potential market reversals.