How Does the “Fear and Greed Index” Reflect a Flight to Quality Event?

The Fear and Greed Index measures market sentiment. A low reading (extreme fear) often coincides with a flight to quality event.

When fear is high, investors are more likely to sell speculative altcoins and move to safer assets like Bitcoin or stablecoins. The index reflects the emotional state that drives the de-risking behavior, as high fear typically leads to panic selling of the riskiest assets first.