Fear and greed are the two main driving emotions in the market. Fear is born when the thought arises that the deal will not be opened on time or, for example, will have to be closed earlier, even before the stop or limit is reached.
Greed, like fear, can influence decisions made in trading: make you increase leverage, play big, ignore risks. Every day, we analyze emotions and moods from different sources and combine them into one simple number: the index of fear and greed. The behavior of crypto market players is very emotional. People get greedy when the market rises and this leads to the formation of FOMO (Forgone Profit Syndrome). In addition, people often sell their coins, irrationally reacting to red numbers in exchange rates. The developers of the Fear and Greed Index are trying to save users from emotional overstrain. There are two basic assumptions:
Extreme fear is a sign that investors are too worried. This could be a good opportunity to buy an asset.
When investors become extremely greedy, it means that a correction is needed in the market. The original name of the index sounds like "Crypto Fear & Greed Index". Initially, it was invented for bitcoin, but over time, they began to try to adapt it to altcoins. The visual representation of the index looks like a scale with divisions and sectors. For example, the "Fear" sector will mean a fall in the market with a price drop to the minimum. And if the arrow falls on the “Greed” sector, then this is a signal about the intensity of the cryptocurrency, indicating the likely approach of a course correction.
The Fear and Greed Index is certainly a good tool. With its help, as we can see, it is possible to build theories regarding the further development of events, but relying on such forecasts with 100% certainty is not the best option. Why? Yes, because he evaluates the state of affairs in the present tense.
And this is where the Exorde protocol can help. The Exorde Index measures market sentiment BEFORE trading takes place. Exorde is built around a core platform that provides unbiased credibility scores for information (and virality-related analytics) based on the community, AI modules, and a token-based economy.
Exorde uses an open source decentralized protocol to collect data from around the world. The project is based on the idea of decentralization, which guarantees data neutrality and transparency. Exorde aims to extract and sell brand/cryptocurrency/share reputation scores based on what people say on social media.
Exorde receives input URLs for public information such as social media posts, press articles, photos, and videos. These URLs are then processed in a decentralized data pipeline that produces output graphs linking all similar data and facts. The analyzed content is stored in an archive that has open access, so any person can access the original information at any time and from anywhere in the world.
Exorde is run by its DAO (Decentralized Autonomous Organization) and uses community votes and polls. Management will be decentralized among all members of the community. Collectively, they will be able to change the internal rules and parameters of the systems (rewards, limits, delays, scheduling, etc.) and will have a built-in reputation system. These mechanisms are designed to continually align the interests of the community and its governance for the benefit of Exorde.
Fake news, misinformation and bias are perhaps the biggest threats. While the Exorde protocol will not eliminate these problems, it will provide a tool for discovering information, identifying differences in viewpoints across platforms, demographics, and geographies. And of course, to create a more accurate picture of the prevailing opinions.
Written by Moonvoyager
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