Fear and Greed Index — A Trader's Sentiment Tool

Understanding the Index

The Crypto Fear and Greed Index ranges from 0 (extreme fear) to 100 (extreme greed). It aggregates volatility data, market momentum, social media sentiment, surveys, Bitcoin dominance, and Google Trends.

Practical Trading Application

Extreme Fear (0-24): Historically excellent long-term buying zones. But wait for technical confirmation — a bullish signal at support combined with extreme fear is powerful.

Extreme Greed (76-100): Time for caution. Reduce position sizes, tighten stop-losses, take partial profits. Avoid new leveraged positions.

Transition Zones: Watch when the index crosses above 25 (fear to neutral) — often marks recovery beginnings. Crossing above 75 often marks the final euphoric phase.

Limitations

This is a sentiment tool, not a crystal ball. Use it alongside RSI, Fibonacci levels, and portfolio management principles.