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Bitcoin, Fear and Greed: Where is the Edge?

Making decisions based on the Fear and Greed Index

Ecoinometrics

Aug 26

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In today's edition of the newsletter, we'll challenge conventional wisdom and argue that greed, or more precisely extreme greed, might actually be good for Bitcoin investors.

This insight emerges from our analysis of the relationship between the crypto Fear and Greed Index and Bitcoin's price movements.

It's a counterintuitive concept, so let's dive in and explore the data behind this idea.

The Ecoinometrics newsletter gives you insights from crypto and macro data to help you make better investment decisions.

We spend hours every day gathering data, creating metrics and bringing them to life with data visualizations that allow you to quickly get to the heart of things.

We then distill all that knowledge in each issue of the newsletter with less words and more charts so that you get insights, direct to the point, in five minutes or less.

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Bitcoin, Fear and Greed: Where is the Edge?

The Takeaway

Our analysis of the crypto Fear and Greed Index challenges conventional wisdom.

Extreme Greed, rather than signalling a market top, often precedes further short-term gains for Bitcoin.

Conversely, the Fear regime emerges as the most cautious period for investors, with lower probabilities of positive returns.

These findings suggest that successful Bitcoin investment strategies may involve riding momentum during periods of Extreme Greed and exercising patience during Fear, rather than following traditional contrarian approaches.

What's Driving Fear and Greed?...

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