You have probably seen the Fear and Greed Index on Binance đ”âđ«
But most traders do not really understand what it means.
Let me break it down in a simple way.
The Fear and Greed Index measures market emotion, not fundamentals.
It looks at things like:
âą Price momentum
âą Volatility
âą Trading volume
âą Social sentiment
In short, it reveals how people perceive the value, rather than what the asset is actually worth.
Here is the key thing to remember đ
When fear is high, most retail traders panic.
They start selling their positions.
But very often, instead of the market crashing, price starts to pump.
Why?
Because whales and hedge funds love buying when retail traders are scared and selling.
Now flip the situation.
When greed is high, retail traders rush in.
Everyone feels bullish. Everyone wants to buy.
At the same time, smart money starts selling.
Why does price dump then?
Because whales and hedge funds need buyers to exit their positions, and retail traders provide that liquidity.
In simple terms, retail becomes exit liquidity.
So while retail is buying, whales are quietly selling.
That is why the rule is simple:
đ High fear = market often pumps
đ High greed = market often dumps
Now you understand why these moves happen and how to read the Fear and Greed Index properly.
Keep learning, keep observing the market,
and follow @D A R V E S H . We teach trading the right way đŒ