Crypto Fear & Greed Index: A Tool for Market Sentiment Analysis

The Crypto Fear & Greed Index is a tool that compresses the emotional state of the crypto market into a single number between 0 and 100. Below 50, the market leans fearful, while above 50 it leans greedy. The closer the score is to either extreme, the more one-sided market sentiment has become.

The index draws from six blended inputs: volatility, momentum and volume, social media sentiment, surveys, Bitcoin dominance, and Google Trends. Volatility and momentum carry roughly 25% weight each, while the remaining signals split the rest. The original Fear & Greed Index was built by CNN for traditional markets, using seven market indicators to compress investor emotion into one score.

The Crypto Fear & Greed Index is most useful at extremes, where it signals one-sided positioning. However, it requires price, volume, and derivatives confirmation before driving any trading or investment decision. The index has been shown to be more accurate in describing the present than predicting the future.