Definition ∞ Fear to greed describes a spectrum of investor sentiment that oscillates between extreme apprehension and excessive enthusiasm in financial markets. This psychological dynamic significantly influences market behavior, often leading to irrational decisions. A market driven by fear typically sees selling pressure, while greed can fuel speculative buying. Understanding this sentiment helps interpret market movements.
Context ∞ The “Fear & Greed Index” is a commonly cited metric in cryptocurrency news, reflecting prevailing market psychology and its potential impact on digital asset prices. Discussions often center on how this sentiment dictates short-term market trends and investor reactions to news events. A critical future development involves analyzing whether this emotional spectrum moderates as the digital asset market matures.
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