In principle, the index can also be created by the user and can therefore be even more effective under certain circumstances. Of course, the data used must be correct and used correctly. A certain basic knowledge of market events and reactions should be available in order to realistically assess the effects of certain events. Weighting also plays an important role in the analysis. This consists of the following factors:

Volatility (25 percent)

Strong price fluctuations or strong changes are a sign of a rather anxious market, a stable price trend symbolises more security. The Fear and Greed Index measures the current volatility and compares it with the average of the last 30 -90 days.

Market volume and momentum (25 percent)
Provides information about market activities and is therefore a very important factor. The more market volume, the more traders participate. This factor can be read from the current market volume in relation to the average of the last 30 or 90 days. The higher the purchase volume in a positive market, the higher the greed factor.

Social media (15 percent)
Social media is a good meeting place for the exchange of crypto currencies. There is a particularly strong community on Twitter, which monitors the market continuously. The higher the inquiries and the interest, the higher the greed factor.

Survey (15 percent)
By means of surveys, the mood and prognoses of the participants can be queried directly. The more people participate, the more accurate the results.

Dominance (10 percent)

The dominance of a coin reflects its share of the total market capitalisation. A high dominance of Bitcoin may represent an uncertain market, as many investors are shifting their investments from risky old coins to Bitcoin.

Trend (10 percent)
Another powerful tool to analyze the interest of users is Google Trends. With this tool, entries in Google can be evaluated, which are related to a specific search term. If interest in Bitcoin increases, search queries and possibly also the share price rise synchronously.