The Crypto Fear & Greed Index is a sentiment indicator that aggregates multiple data sources to give a single 0-100 score representing market emotion in cryptocurrencies.
How it's calculated
The index combines six factors: volatility (25%), market momentum and volume (25%), social media sentiment (15%), surveys (15%), Bitcoin dominance (10%), and Google Trends (10%). Each factor is normalized and weighted to produce the final score.
How to use it
Most investors use it as a contrarian indicator: when the index shows Extreme Fear (below 25), many see it as a potential buying opportunity. When it shows Extreme Greed (above 75), they consider taking profits or being more cautious about new purchases.
What it means for your finances
If you're dollar-cost averaging into crypto, this index can help time additional purchases — buying more during fear, less during greed. However, sentiment can stay extreme for weeks or months, so it's not a precise market timing tool. Use it as one input among many.