The clash of two emotions, fear and greed, is said to determine investors’ sentiment. This ratio draws a historical picture of the market and it’s also an indicator of its future state. As an established trend, traditional investments such as stocks and digital assets like cryptocurrencies often move in opposite directions. The beginning of 2020 has provided another example of that.
Also read: China Stocks Plummet Despite 1.2 Trillion Yuan Injection to Mitigate Effects of Epidemic
S&P 500 Fear and Greed Index Slides Into Fear Territory
Economic crises and financial meltdowns, geopolitical tensions, trade wars, and epidemics, such as the coronavirus outbreak in Asia, affect traditional investments and cryptos, often in different ways. Stocks, for example, tend to fall when investors see risks for the traditional economic and financial systems, while decentralized digital currencies usually gain value in this type of situation.
The CNN Fear and Greed Index, which gauges emotions of stock investors, looks at seven indicators such as…