What does the Fear and Greed Index measure and how did its recent Extreme Fear value affect Bitcoin?
Why is this the correct answer?
The Fear and Greed Index aggregates data such as volatility, market momentum, social media activity, and surveys to gauge whether traders are fearful or greedy. A reading of 21 falls in the Extreme Fear zone, suggesting that many traders are overly pessimistic. Historically, such oversold conditions can precede a market stabilization or rebound because extreme selling pressure tends to exhaust itself and attract contrarian buyers.
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