The Fear & Greed Index: how to read crypto sentiment

What goes into the score

The index published by Alternative.me is updated daily and is currently calculated for Bitcoin only. It combines six inputs, each with a stated weight:

• Volatility, 25%: an unusual rise in volatility is read as fear
• Market momentum and volume, 25%
• Social media, 15%
• Surveys, 15%, listed by the publisher as currently paused
• Bitcoin dominance, 10%: a rising share of BTC in the market is read as fear
• Search trends, 10%

Zero means extreme fear and 100 means extreme greed. Because Bitcoin sets the tone for most of the market, the score is widely used as a gauge for crypto as a whole.

Extremes matter more than the daily number

A move from 52 to 58 says little. Readings in the extreme bands are more informative: they mark periods when most participants are positioned the same way.

Extreme fear has often appeared near local lows and extreme greed near local highs, but the index can stay extreme for weeks while price keeps moving. Treat an extreme reading as a reason to review your risk, not as an entry.

Using it in a plan

• Contrarian context: in extreme greed, avoid adding size late in a move; in extreme fear, look for the setups you already planned instead of selling in a panic.
• Combine it with price: a fear reading while price holds a support zone tells you more than either one alone.
• Compare with yesterday and last week, not just today, to see whether sentiment is turning.

Its limits

The index summarises other data once a day, and one of its inputs is paused. It lags fast moves and can be pushed around by a single input such as a volatility spike. It measures mood, not value, and it is not a buy or sell signal.