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Cryptocurrency greed and fear index, a tool that allows you to control the emotions of market participants for effective work with digital assets, has a size from 0 to 100. For example, a parameter of 75–100 indicates the predominance of greed, and 0–24 indicates fear. A low indicator allows us to conclude that cryptocurrencies are undervalued and may be a signal for a depreciation. The growth of the indicator, on the contrary, indicates overvaluation, an increase in demand and, accordingly, prices.
Information about the index allows you to determine how market participants are currently configured: to buy or sell an asset. The prevalence of “greed” indicates a potential readiness for correction and the start of sales, while fear is a reason to think about buying a payment instrument. The parameter is actively used in the market and stock exchanges, because it reflects the mood of investors and allows you to make a decision about further steps.
Cryptocurrency Fear Index is an indicator showing low demand for cryptocurrencies. It depends on the news background, traders' reviews, comments on forums, information and media, etc. The parameter reflects the mood of the market, but has almost no effect on it. The basis of the indicators does not contain information on the volume of trading, the movement of capital.
The greed index is the opposite parameter, indicating the emergence of a sharp interest in cryptocurrency. Against this background, demand and price are growing, which requires a wait-and-see attitude. During such a period, the value of digital assets is usually overpriced and cannot be adjusted.
Cryptocurrency fear and greed indicators react late to the market. This means that the index can increase when the price has decreased, and vice versa. In some cases, a high or low rate may be held at a certain level for several days. Therefore, you need to remember that such a tool cannot be called 100% accurate, so you need to use a complex approach that would take into account many other parameters.
And this is where the Exorde protocol can help. The Exorde Index measures market sentiment BEFORE trading takes place. Exorde is built around a core platform that provides unbiased credibility scores for information (and virality-related analytics) based on the community, AI modules, and a token-based economy.
Exorde uses an open source decentralized protocol to collect data from around the world. The project is based on the idea of decentralization, which guarantees data neutrality and transparency. Exorde aims to extract and sell brand/cryptocurrency/share reputation scores based on what people say on social media.
Currently, the protocol can define the following relationship:
Neutral - Awareness - Confusion - Entertainment - Approval - Curiosity - Disapproval - Love - Annoyance - Caring - Gratitude - Surprise - Optimism - Nervousness - Admiration - Excitement - Joy - Desire - Disgust - Fear - Anger - Disappointment - Sadness - Embarrassment - Pride - Relief - Remorse - Grief.
Exorde receives input URLs for public information such as social media posts, press articles, photos, and videos. These URLs are then processed in a decentralized data pipeline that produces output graphs linking all similar data and facts. The analyzed content is stored in an archive that has open access, so any person can access the original information at any time and from anywhere in the world.
Exorde is run by its DAO (Decentralized Autonomous Organization) and uses community votes and polls. Management will be decentralized among all members of the community. Collectively, they will be able to change the internal rules and parameters of the systems (rewards, limits, delays, scheduling, etc.) and will have a built-in reputation system. These mechanisms are designed to continually align the interests of the community and its governance for the benefit of Exorde.
If you want to see the Exorde Index in action, visit https://exorde.io/. If you have questions about the Exorde Index or the protocol behind it, please visit our Discord: https://discord.gg/ExordeLabs.
Written by Bimevox
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