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Crypto Fear & Greed Index Hits 79, Enters ‘Extreme Greed’ Zone The Crypto Fear & Greed Index, a key indicator of market sentiment, has surged to 79 as of December 26, marking a six-point increase from the previous day. Provided by the analytics platform Alternative, the index has shifted from the “Greed” zone into the “Extreme Greed” zone, reflecting heightened optimism among cryptocurrency investors. This significant rise signals a notable shift in market sentiment, driven by improved momentum and increasing activity across key factors tracked by the index. What is the Crypto Fear & Greed Index? The Crypto Fear & Greed Index is a widely followed metric that evaluates investor sentiment in the cryptocurrency market. It ranges from 0 to 100, with lower scores indicating “Extreme Fear” and higher scores representing “Extreme Greed.” How the Index is Calculated The index is derived from six key factors, each contributing to the overall score: Volatility (25%): High volatility often correlates with fear, while stability indicates confidence. Market Momentum/Volume (25%): Increasing trading volume and momentum are signs of greed. Social Media (15%): Sentiment analysis on platforms like Twitter tracks public opinion. Surveys (15%): Polling market participants helps gauge collective sentiment. Bitcoin Dominance (10%): Higher Bitcoin dominance may indicate fear as investors retreat to safer assets. Google Trends (10%): Searches for crypto-related terms often reflect market interest levels. What Does ‘Extreme Greed’ Mean? The “Extreme Greed” zone indicates heightened optimism and confidence among investors, often driven by rising prices and strong market momentum. While this can signal bullish sentiment, it also serves as a cautionary flag for potential market corrections. Historical Trends In bull markets, Extreme Greed often precedes significant rallies as euphoria drives prices higher. In bear markets, such levels can signal overconfidence, making the market vulnerable to sharp corrections. Factors Driving the…