Crypto sentiment recovers: greed and fear index rises 8 points in 24 hours

According to data reported on January 2nd by Alternative, the indicator measuring the sentiment of the cryptocurrency market experienced a significant change. The fear and greed index registered 28 points, showing a substantial recovery from the previous day’s 20 points.

This 8-point improvement marks an important turning point: the market has shifted from an “extreme fear” zone to “fear” territory, suggesting that investors are gaining some confidence after days of downward pressure.

How does this indicator work?

The fear and greed index is constructed from a multi-dimensional analysis that captures different aspects of market behavior:

Main components:

• Market volatility (25% weighting)
• Trading volume (25%)
• Activity and mentions on social media (15%)
• Sentiment surveys among traders (15%)
• Bitcoin dominance in total market capitalization (10%)
• Google search trends (10%)

The scale ranges from 0 to 100, where values close to 0 indicate “extreme fear” — similar to what we recorded recently — while figures near 100 reflect “greed” or market euphoria.

What this movement means

The increase from 20 to 28 points reflects a change in market psychology. Although we are still far from euphoria zones, this rebound suggests that some investors are beginning to see opportunities after recent pressure, and market indicators show some stabilization.