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The Fear and Greed Index is a market sentiment indicator that measures the emotions driving investor behavior—specifically fear and greed—in financial markets. It is commonly used in stock and cryptocurrency trading to gauge whether markets are undervalued (fear-driven) or overvalued (greed-driven). The index ranges from 0 to 100, where lower values indicate extreme fear (potential buying opportunities) and higher values reflect extreme greed (possible market corrections). It is calculated using various factors such as market volatility, trading volume, momentum, and investor surveys. Traders and investors use the Fear and Greed Index as a tool to identify market sentiment trends and make more informed decisions.
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