Research on the Relationship Between the Cryptocurrency Greed Index and Liquidation Amounts

Abstract

Nowadays, the price of cryptocurrencies, especially its representative currency Bitcoin, has risen sharply. However, the high volatility of Bitcoin makes it easy for many contracts to explode in a short period. Meanwhile, the Greed Index is a virtual currency platform launched to measure the emotional state of various cryptocurrency users towards the currency, whether they are greedy or fearful. This paper aims to explore the specific relationship between the amount of Bitcoin’s exposure and the greed index by exploring the linear programming model. Nowadays, many studies and theories have been launched to study the factors that affect cryptocurrencies and to speculate on the price trend of cryptocurrencies. However, what many studies fail to note is that the contract market for cryptocurrencies is also very active, and many cryptocurrency users attempt to use leverage to make high profits, and this behavior is very influenced by emotions. This article finds a relationship between the amount of cryptocurrency Liquidation and the Greed Index. This paper hopes to use the quantitative model to explain the specific trend and influence relationship, and at the same time for investors and market regulators a new way of thinking.