Fear & Greed Index Drops to 51 After One-Day 26.1% Plunge

The cryptocurrency Fear & Greed Index dropped from 69 to 51 within a single day, transitioning from 'Greed' to 'Neutral' according to Alternative.me's data released on the 16th. The index scored 51 out of 100, down 18 points (26.1%) from the previous day's reading of 69. Alternative.me classifies 0 as 'Extreme Fear' and 100 as 'Extreme Greed.' The index quantifies market sentiment by combining volatility, market momentum and trading volume, social media reactions, Bitcoin dominance, and search trends, with weighting percentages of 25% for volatility, 25% for market momentum and volume, 15% for social media, 10% for Bitcoin dominance, and 10% for search volume. Survey items are currently suspended in the calculation process. The index is calculated primarily around Bitcoin (BTC), with Alternative.me noting that its current focus on Bitcoin stems from the significant weight given to Bitcoin price volatility in the index's calculation. The shift to neutral indicates a market sentiment not heavily skewed in one direction, though the index does not directly predict prices or trading directions but serves as a reference indicator showing shifts in Bitcoin-centric market psychology. Relying solely on the Fear & Greed Index for price direction of Bitcoin or altcoins is challenging, and further psychological changes alongside price and volume trends must be monitored to assess market sentiment sustainability.