What the index measures
The crypto Fear & Greed Index compresses market sentiment into a single number from 0 (extreme fear) to 100 (extreme greed). Unlike price or volume, it isn't a direct market measurement — it's a synthetic gauge of mood: panicked markets read low, euphoric markets read high. That makes it less a trading signal than a thermometer, and thermometers are most useful when you know what they're actually measuring.
How it's built
The widely cited version, published by alternative.me, is a weighted blend of several inputs:
- Volatility — elevated volatility versus recent 30/90-day averages reads as fear.
- Momentum and volume — strong buying volume in a rising market reads as greed.
- Social media activity — the volume and tone of crypto discussion.
- Bitcoin dominance — used as an input for inferring shifts in market preference between BTC and altcoins. (More on dominance in the BTC dominance guide.)
- Search trends — the volume of Bitcoin-related search queries.
- Surveys — part of the original methodology, though currently paused.
Because the output is an algorithmic composite, the exact value matters less than the zone it sits in and the direction it's moving.
The zones
| Range | Label | Typical backdrop |
|---|---|---|
| 0–24 | Extreme fear | Panic selling, sharp drawdowns |
| 25–49 | Fear | Bear market or ongoing correction |
| 50 | Neutral | Directionless, range-bound trade |
| 51–74 | Greed | Uptrend, buyers in control |
| 75–100 | Extreme greed | FOMO buying, short-term overheating |
The famous contrarian reading — "be greedy when others are fearful" — has a real basis: extreme zones held for extended periods tend to mean-revert. But fear isn't automatically a buy signal, and greed isn't automatically a sell. The zones mark conditions, not timing.
How traders actually use it
- Staged accumulation. Extended stays in extreme fear (0–24) are where contrarian buyers start scaling in — in tranches, never all at once, because "extreme fear" can always get more extreme.
- Restraint check. Extended extreme greed is when chasing new entries has historically been most expensive; many traders shift focus from adding to managing what they hold.
- Divergence. Price making new highs while the index stalls or falls suggests the crowd isn't buying the rally emotionally — worth noting, though like all divergences it's context, not a trigger.
- Trend over level. The 30-day history — how fast sentiment is shifting and in which direction — carries more information than today's number.
The limits
- It's a condition, not a clock. The index can sit in an extreme zone for weeks. Anyone using it as an entry trigger will be early, often painfully so.
- It's Bitcoin-weighted. The index primarily reflects BTC-centric sentiment; an individual altcoin's mood can be entirely different.
- It's crypto-only. Macro forces — rates, equities, the dollar — move crypto but don't feed the index directly.
Pairing it with other reads
Sentiment is one lens; positioning and flows are others. The index pairs naturally with Bitcoin dominance (where the money is rotating), funding rates (what leveraged traders are paying to stay positioned), and — for a Korea-specific view — the kimchi premium, a market-based read on demand in South Korea's crypto market. When several of these point the same direction, the read is worth far more than any one of them alone.