Extreme Fear? Does this mean Extreme Buying Opportunity?
Disclaimer: the following is not financial advice and is simply my opinion/thoughts. Please do your own research and make your own financial decisions.
The Crypto Fear & Greed Index(FGI)
Someone recently shared this resource with me on a telegram group:
- Metrics: votality, market momentum/volume, social media, surveys, dominance, trends
This is quite similar to the Bitcoin Misery Indexthat Tom Lee, founder of Fundstrat, created:
"The index incorporates the percentage of winning trades to total trades, as well as volatility. It shows a value of 0 to 100. The index is considered “at misery” when the value is below 27. As a contrarian index, the closer the index is to zero the louder the “buy” signal."
The FGI seems much more accessible (free) than the Bitcoin Misery Index (BMI), as I have only seen BMI referenced/discussed or screenshots of the chart. I would think the BMI is a product one must pay for. Further, the FGI has differences as you can compare. Still they are both contrarian resources for crypto investing.
To me, the FGI has a great score right now if you are looking at contrarian indicators for investments. Doesn't mean I'm buying today.
Tom Lee has some fairly good points for a Bitcoin bull case, though I would say he has his critics and he is not always right. One of his most notable is that most of historical BTC growth occurs on a very small amount of days per year (read: don't miss it because you're trying to time the market). The BMI is a contrarian indicator, meaning when it looks the worst, it can be a good time to invest. Everyone's panicking and letting their emotions rule them and their decisions. Don't do that. Why follow lemmings off a cliff?
As I've said before, big investors are studying Bitcoin(and crypto) and very interested in getting in; regulatory uncertainty is large part of what is delaying everything, though the SEC chairman thinks he has been quite clear
- I think there has been progress here in terms of understanding what the SEC wants and relevant crypto projects moving in a direction the SEC wants to see
Conclusion
Overall, I'm preparing myself for Bitcoin to possibly drop as low as 3-4K as some extreme bears have stated. Might or might not happen. That actually doesn't mean I'm exiting crypto, however. If it does, I'm trying to set aside new fiat in preparation for some really cheap crypto, relative to where it could go.
Furthermore, I'm continuing to invest in ICOs that I believe are really strong projects, though I will say I'm going to be more picky as the bear market continues. Lastly, if I review a project on this blog, that doesn't mean I am or am not investing. If you're curious, hit me up on my telegram or in the comments below.
My other content: