The Bitcoin fear and greed index rose from 52 to 54 on Thursday, November 18, 2021, according to data available on alternative.me. The index measures sentiment in the cryptocurrency market.

Also Read| Bitcoin, Ethereum and other cryptocurrency prices on November 18

The indicator, which is based on two opposing emotions,  determines whether the market is bullish (expecting persistent increase) or bearish (expecting sustained decrease).

Also Read| Petrol stays at Rs 103.97, diesel Rs 86.67 in Delhi; check November 18 fuel prices

The index’s primary principle is that when investors are frightened, an asset trades lower than its true worth, and when investors are greedy, they pay more than the intrinsic value.

Also Read| Top 15 things to know before market opens on November 18, 2021

Extreme fear is a signal for possible entry by traders and extreme greed indicates that the market is ready for a correction.

The index is rated from 0 to 100, with 0 indicating investors are extremely afraid, and 100 indicating they are overly optimistic.

Also Read| Paytm listing on BSE, NSE: Carrying young India’s hopes to stock market, says chief

The cryptocurrency market is considered to be oversold at index scores less than 25, and overbought above 75.

The index calculates its score using six variables: volatility, market momentum, social media, surveys (now paused), dominance, and trends.

Also Read| Gold, silver and other metal prices on November 18, 2021

Although perspectives on the usefulness of the crypto fear and greed index differ, it has traditionally been a reliable indicator of substantial change.

Also Read| Stock market midday report: Sensex declines over 500 points, Nifty around 17,700

Investors generally believe that an index is a valuable tool for assessing the market, as long as it is not the sole instrument used to make judgments.