When currency prices begin to plummet, investor sentiment will be affected, and this sentiment is often reflected in currency prices. In order to quantify the impact of this emotion on the market, the "Bitcoin Fear Index" was born.
What is the Bitcoin Fear Index? The Panic Index analyzes people's emotions through different sources and data every day to form a simple index.
It can be viewed through the index function of MyToken
The panic index is generally measured through currency price trends, trading volume, social media, surveys, the proportion of Bitcoin market value (the higher the proportion of BTC, it means that investors buy BTC for safety, and the market is more panicked), search trends (google search trends about Bitcoin, More people searching means high popularity, less searching means panic or no one enters the site) These dimensions are calculated. The level of the panic index can be used as a reference for investment to a certain extent. Because, the cryptocurrency market behaves very emotionally. When the market rises, people tend to become greedy and worry about missing out (FOMO: Fear of missing out, remember the recently popular fund + pyramid scheme game FOMO 3D? FOMO means fear of missing out). Moreover, when the market falls, people tend to sell their assets irrationally. With this panic index, it can provide a certain reference and predict the market direction to a certain extent.
There are two assumptions here:
Extreme panic can serve as a sign that investors are very worried, which can serve as a buying opportunity.
When investors become extremely greedy it means the market may be at the end of a bull market.
Because, we analyze the sentiment of the Bitcoin market and reflect this data into a simple graph from 0 to 100, with 0 representing extreme panic and 100 representing extreme greed.