Bear & Bull Index for Cryptocurrencies
What Is the Crypto Bear & Bull Index?
The Bear and Bull Index is an innovative index that analyzes the crypto market on a scale of 0 to 100, to determine if it’s bearish or bullish.
A score of (0 to 39) indicates the market is Bearish. A score of (40 to 59) suggests the market is Neutral and can go either way, depending on the current state of the market. A score of (60 to 100) suggests the market is Bullish.
When deciding if you should buy (opt-in) or sell (opt-out) of the crypto market, a good trader or investor will always look for technical indicators. There are indicators to look at, trends to study, and chart patterns to analyze but many metrics and indexes currently available are quite complex and difficult for the average crypto investor to understand. With the Bear and Bull Index, you get an overall view of the market; Is it Bearish, Neutral, or Bullish without having to do any TA (Technical Analysis).
Why Bear & Bull Index
The average crypto investor relies on influencers on social media to know when to enter and exit the market, but at the end of the day, they end up getting burned because many crypto influencers change their view very quickly, and sometimes their analysis is based on sentiment not backed by any technical analysis. The Bear and Bull Index provide an unbiased view of the market, it visualizes the current state of the market in 3 simple levels (Bearish, Neutral, or Bullish).
How does the Crypto Bear and Bull Index work?
Each day, we compile inputs from the market and other sources that are available to calculate a new value from 0 to 100.
The Bear and Bull Index analysis includes:
1. 24hrs Trading Volume on Exchanges.
2. Social Media: Social Engagement and Volume on Social Media of BTC and other large coins.
3. Exchange Inflows of BTC and other large coins: An increase in inflows surely suggests increased selling pressure in the market.
4. Interest in Stablecoins: Strong social activity around Stablecoins can be a bearish indicator.
5. Change in Stablecoins & BTC held on Exchanges: Assets held on exchanges increase if more market participants want to sell than to buy and if buyers choose to store their assets on exchanges.
6. BTC Relative Strength Index (RSI): RSI is an indicator that evaluates overbought or oversold conditions in the price of an asset. The RSI is a line graph that moves between two extremes and has a reading from 0 to 100. Traditional usage of the RSI is that:
- Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience correction in the Bitcoin (BTC) USD price.
- An RSI reading of 30 or below indicates an oversold or undervalued condition.
7. Fear & Greed Index: The Crypto Fear and Greed Index analyzes a basket of different trends and market indicators to determine whether the market participants are feeling greedy or fearful. A score of 0 indicates extreme fear, while 100 suggests extreme greed. A score of 50 shows the market is somewhat neutral.
Sometimes we choose to pause some inputs to get a more accurate reading (to avoid manipulation)
Can I use the index for long-term analysis?
No, the indicator doesn’t work well on long-term analysis of crypto market cycles. It’s a short-term analysis. It analyzes the current state of the market in a 24hrs time frame, it’s time-sensitive and can come in handy for swing traders.
How to use the Bear and Bull Index
As always, it’s recommended that you don’t rely solely on one indicator or style of analysis. Make sure to do your own research (DYOR) before investing any money and only invest what you can afford to lose, this is for educational purposes only.
There are some key indicators on our charts that can improve your trading strategy:
- Relative Strength Index (RSI).
- Fear & Greed Index.
- 24h Trading Volume.
- Bear & Bull Index.
The Crypto Bear and Bull Index is a simple way to get a general view of the market but complementing it with other metrics and indicators will give you a more balanced view of the market.