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What is the index of fear and greed and can it be a good criterion for buying and selling cryptocurrencies or not?

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One of the indicators that we have in the cryptocurrency market and its value is determined based on market psychology, is an indicator called fear and greed.
You can see this index in a site called alternative.com. After entering the site, it is enough to enter the crypto section to be able to see the index of fear and greed.
This value is measured based on various factors that we will tell you in the following and also based on a number from zero to one hundred. As much as this number tends to zero, it means that greed in the market has increased a lot and when this number goes to zero, it means that there is a strong fear in the market.
Now the question is what factors affect this index?
One of the indicators that is effective is the level of participation of individuals as well as the hashtags that are exchanged on social networks.
Another factor that greatly affects this index is the dominance of Bitcoin in the market. As you know, the bitcoin dominance is currently around 56%, which shows the approximately $350 billion cryptocurrency market, Bitcoin now holds 56 percent, or about $197 billion. Basically, when this amount and this bitcoin dominance increases, that is, the number moves towards 100, the fear and greed index also moves towards fear; And when the dominance of Bitcoin in the market decreases, it creates more greed in the market because when the dominance of Bitcoin in the market decreases, the market for altcoins or currencies other than bitcoin becomes hot and we see that a lot of profits are happening for Altcoins.
Another factor that affects the fear and greed index is the volume of exchanges and the price of each of these cryptocurrencies. Of course, cryptocurrencies that have a lot of transactions, such as Bitcoin, ETH and currencies of this group that transactions as well as their market cap is high.
Another factor that affects the index of fear and greed is the price fluctuations that occur for cryptocurrencies.
These are among the most important factors that affect the increase and decrease of the index of fear and greed.
Now a number of people use this index to buy or sell a cryptocurrency.
This can be very helpful if your vision is to invest
because many people ask when is the right time to enter the market? When can we sell our cryptocurrency?
Using this index, you can easily buy and sell.

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