If there’s 1⃣ investment advice that you frame and keep, let it be this:
“Emotions should never dictate investment decisions.”
But the environment we’re in now, fear is dominating crypto investments.
The Crypto Fear and Greed Index proves that market sentiments are bearish.
But what is the Crypto Fear and Greed Index?
It is a score developed by
that scores fear and greed sentiments in the market between 0 and 100.
This is how the Crypto Fear and Greed Index is measured: •0 – 24 = Extreme Fear •25 – 49 = Fear •50 – 74 = Greed •75 – 100 = Extreme Greed
While the index primarily scores for BTC, it is a good indicator for the rest of the market.
It takes volatility, market momentum and volume, social media sentiments, surveys, Bitcoin dominance and Google trends into account.
As you can see, the market is currently dominated by extreme fear.
The primary factor driving fear right now is the FTX fiasco.
But, if you really think about it, the fundamentals of crypto haven’t changed.
DeFi is as strong as ever and more relevant than ever before.
So, how do you navigate a market that is extremely fearful?
As Warren Buffett famously said, “Be fearful when others are greedy and be greedy when others are fearful.”
First, you need to be cognizant of the fact that trends reverse.
The signs of extreme fear indicate that it could be the start of a greed phase.
How? Savvy investors know that this is the time to enter the market since crypto assets are undervalued.
Next, remember that crypto is a long-term game.
It’s risky to make a quick buck.
So, find tokens and protocols that show potential in the long run.
DYOR as much as you can.
Now is the time to learn about the market in and out.
Find hidden gems and invest in them.
Look for protocols that are BUIDLing solid products now.
They may blow up in the future and give you returns that can shoot your investment to the moon.
Find protocols that provide RealYield.
Instead of protocols that generate income through token emissions, find ones that provide returns through real revenue generation.
The returns may look modest, but it will be more sustainable in the long run.
•Don’t let fear or greed dictate how you invest
•Remember that trends reverse •Look for protocols with real value
•Do your own research
•Look at crypto as a long-term game
Use the Crypto Fear and Greed Index to gauge the market sentiment and then use technical and fundamental analysis to make your investments.This post is based on this twitter thread.