The index being at 55 indicates that there is no significant trend of fear or excessive optimism in the market. However, the 6-point daily drop points to a notable shift in investor sentiment.
CoinMarketCap considers the price movements of the 10 largest cryptocurrencies by market capitalization in its index calculation. Market volatility is also among the key components used in the calculation.
In addition, indicators in derivative markets, particularly the put/call ratio used in the options market, are taken into account to assess investors’ risk perception.
Other components of the index include the stablecoin supply ratio (SSR) and search data from the CoinMarketCap platform.
Recent data reveals that the greed trend seen in the cryptocurrency market in previous days has weakened. However, the index’s retreat to neutral territory does not, by itself, mean the beginning of a new period of price decline or rise.
*This is not investment advice.
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