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What is Bitcoin Panic Index?


What is Bitcoin Panic Index?

Recently, the price of coins has plummeted, and investor sentiment has been affected, and this sentiment is often reflected in the price of coins. In order to quantify the impact of emotions on the market, the "Bitcoin Panic Index" was born. Thus, the panic index is a simple index that analyzes people's emotions through different sources and data every day. You can find it at alternative.me/crypto/.

The panic index generally adopts the price of currency, transaction volume, social media, surveys, and the proportion of bitcoin market value (the higher the proportion of btc, it means that investors buy btc to hedge, the more panic the market is), search trends (google related to bitcoin Search trends, more people searched for high popularity, less searched for panic or no one coming into play) These dimensions are calculated. The level of the panic index can be used as a reference for investment to a certain extent. Because the behavior of the cryptocurrency market is very emotional.

When the market goes up, people tend to become greedy and worry about missing (FOMO:

Fear of missing out, remember the recent hot money + MLM game FOMO 3D?

FOMO means worry about missing). Moreover, when the market goes down, people can easily sell their assets irrationally. With this panic index, it can provide a certain reference and predict the market direction to a certain extent.
 
Bitcoin Panic Index Symbolism
Bitcoin Symbol

Here are 2 assumptions

Extreme panic can be a sign that investors are very worried, which can be used as a buying opportunity.

When investors become extremely greedy, it means that the market may be the end of a bull market.

Because, we analyze the sentiment of the bitcoin market and reflect this data into a simple diagram from 0 to 100, where 0 represents extreme panic and 100 represents extreme greed.


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